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| US grows by 0.6% in first quarter | US grows by 0.6% in first quarter |
| (10 minutes later) | |
| The US economy grew by 0.6% in the first quarter of 2008, a slightly stronger pace than expected | |
| The first quarter figure from the US Commerce Department exceeded analyst expectations of a 0.2% growth and eased fears of a slowdown. | |
| In the last quarter of 2007, growth slowed sharply to an annual rate of just 0.6%. | In the last quarter of 2007, growth slowed sharply to an annual rate of just 0.6%. |
| The US central bank is widely expected to announce a cut in interest rates to 2% from 2.25% later on Wednesday. | |
| Shares traded higher on the Commerce Department report as fears of a sharp slowdown subsided. | |
| Consumer weakness | |
| Yet consumer spending, which accounts for two thirds of economic activity, grew at the weakest rate since the second quarter of 2001. | |
| It rose 1% after growing 2.3% in the fourth quarter. | |
| Spending on residential construction fell 26.7%, indicating the extent of the slowdown in the American housing sector. | |
| Federal Reserve policy makers began their two-day meeting on Tuesday amid signs that economic growth has stagnated and consumer spending has slowed. |