Stronger consumer spending helped push US growth ahead at a modestly faster rate than previously thought in the first quarter.
The Commerce Department said gross domestic product, the broadest measure of economic output within US borders, grew at a revised 1.9 per cent annual rate in the January-March quarter, better than the 1.6 per cent estimated a month ago.
That exceeded a slim 1.4 per cent rate of growth posted in the fourth quarter of 2002, but remains well under the pace of roughly 3 per cent which economists consider necessary to generate enough jobs to lower the current 6 per cent unemployment rate.
A separate report from the Labor Department highlighted the dearth of hiring that has accompanied a crawling recovery from recession in the first nine months of 2001.
The Labor Department said even though new claims for jobless pay fell last week, the number of people continuing to draw benefits rose to the highest level in about 18 months.
Initial claims for state unemployment insurance benefits, closely watched as a gauge of job markets' resilience, fell to 424,000 in the week ended May 24th from a revised 433,000 in the prior week, the Labor Department said.
But some 3.76 million Americans continued drawing jobless pay in the week ended May 17th, up 83,000 from the prior week and the highest total since 3.8 million in November 2001, shortly after the terror attacks in New York and the Washington area that temporarily hobbled economic activity.
The latest economic data, though not hearty, were taken by financial markets as proof the economy came through a potentially dangerous period unscathed and might be poised for faster growth in the second half of the year with interest rates at 40-year lows and fresh tax cuts in place.
Businesses added to inventories at a slightly stronger rate than first thought in the first quarter - $13.2 billion instead of $12.8 billion, which economists took as a sign of confidence.
