Economy Still Growing, but Barely

Washington, DC, June 26, 2008--The economy grew 1 percent in the first quarter, spurred by stronger sales of U.S. products overseas, according to the Commerce Department.

The 1 percent annualized increase in gross domestic product was a slight improvement from the government's previous estimate of 0.9 percent growth for the January-to-March quarter.

And, it showed the economy logging stronger growth than the feeble 0.6 percent pace registered in the final three months of last year.

In another report, the Labor Department said the number of new applications filed for unemployment benefits held steady over the last week at 384,000. The figure, higher than analysts were expecting, points to a struggling labor market.

The new GDP statistics did not meet what analysts consider one definition of a recession -- two straight quarters of shrinking economic activity.

The housing crisis continues to be a major drag on overall economic growth: builders cut spending on housing projects in the first quarter by 24.6 percent on an annualized basis.

Consumer spending, a major shaper of national economic activity, grew at a pace of just 1.1 percent in the first quarter.

One bright spot keeping the economy going in the first quarter was 5.4 percent export growth.