NEW YORK — America’s economy grew a little more at the beginning of the year than first thought, but it’s still not much to celebrate.
U.S. economic growth between January and March was 0.8% compared to the same time frame a year ago. That’s better than the initial estimate of 0.5%, which came in April, but still pretty sluggish.
Consumers spent a little more than first thought. They popped for long-term items like roofs and kitchen counter tops. State and local government spending also jumped more than initially believed.
Despite the low figure, the pick up in growth may help build the case for the Federal Reserve to raise interest rates in June for the first time this year.
Fed officials have indicated in recent weeks that a June rate hike is on the table — a move that Wall Street had all but written off. The market is projecting a 24% chance of a rate hike in June.
The good news is the economy has picked up momentum in the second quarter of this year, which starts in April. New single-family homes sales surged 16.6% in April compared to March, the best pace since early 2008.
American consumers also showed signs of life: retail sales increased the most in April in over a year. Even wages are ticking up a little bit.
The Atlanta Fed forecasts that second quarter growth could be as high as 2.9%, a real spring bounce similar to what the U.S. economy experienced in the past two years.