Strong spending lifts US economy

President Bush says his tax-cutting law will lift the economy

Strong consumer spending helped the US economy to grow at a faster rate than first thought at the beginning of this year.

Official figures showed that the country's gross domestic product - its economic output - grew at an annual rate of 1.9%.

That is slightly faster than the original 1.6% figure estimated a month ago.

The US Commerce Department said the economy was lifted by consumer spending which grew by 2% during the three month period rather than the 1.4% first estimated.

Stronger exports

Despite the stronger figures, the economy is still sluggish.

Carl Tannenbaum, chief economist at LaSalle Bank, said the economy needed to be growing at a rate of 3% or more to get back into a normal growth pattern and to persuade companies to start hiring.

"Until that happens, it won't feel much like a economic recovery to the average person."

Business investment fell during the first three months of the year, down 4.8% after growing 2.3% during the last quarter of 2002.

There are concerns that falling investment by companies could hamper efforts to create jobs.

But there were other signs of recovery with a rise in company profits during the period and stronger exports than originally thought.

On Wednesday, President George W Bush's tax cutting package became law. He says it will boost the economy and help to create jobs.