GDP growth revised upward
The Commerce Dept. first estimated that GDP for the period grew at a 5.8% pace and then revised that down to 5.6% growth rate a month ago.
The first-quarter economic growth received its biggest boost from slower inventory liquidation by businesses, which added 3.39 percentage points to GDP. That's a turnaround from the 2.16 percentage-point reduction from GDP in the fourth quarter, a key source of the economy's weakness.
Consumers also gave a lift to the economy by increasing spending at a 3.3% rate, though it was down from a 6.1% pace in the fourth quarter.
Citing uncertainties about the recovery's vitality, Fed policy-makers left short-term interest rates at 40-year lows Wednesday, the fourth time this year they opted to leave the rates be.
If interest rates stay low, analysts say consumers might be motivated to spend more and businesses motivated to boost investment in new plants and equipment, which are both crucial ingredients in the recovery.
Economists are also worried that that fallout from the WorldCom accounting scandal could ruin consumer confidence and hamper their willingness to spend. It could also make companies more cautious about big spending commitments, including capital investments and hiring.
