US raises first-quarter growth estimate to 0.8pc

The US economy grew slightly faster in the first quarter of 2016 than originally thought, hitting a 0.8 percent annual pace, the Commerce Department said Friday.

The revision, from the original estimate of a very slow 0.5 percent, was not as high as economists had expected, underscoring some persistent weaknesses, especially in manufacturing.

Even so, economists say that growth in the current April-June quarter has been firm enough to cast behind the early-2016 slump and that the United States will continue to solidly outpace other leading economies for the rest of the year.

Halfway through the second quarter, private and public growth estimates were that the economy has rebounded to a 2.5-3.0 percent annual pace.

And Federal Reserve officials have made clear they think the first-quarter data understates the strength of the economy.

"More recent monthly data are signaling a much better performance in Q2 -- if anything, better, than the 2.5 percent pace in our forecast," said Jim O'Sullivan of High Frequency Economics.