The U.S. Commerce Department said Thrusday that the economy has increased at a 5.3 percent rate in the first quarter of this year. It is the fastest increase in 2-1/2 years.The new report also says that the gross domestic product (GDP) was stronger during the January-to-March period than the 4.8 percent annual rate first estimated a month ago. The GDP measures the value of all goods and services produced within the U.S. and is considered the best barometer of the country's economic fitness.
According to the report, the GDP numbers reflect stronger U.S. exports and better inventory building by businesses.
Economists were predicting an even bigger upgrade to the first-quarter reading before the report was released, according to the Associated Press. Many economists had forecasted economic growth at a 5.8 percent pace. Also on Thursday, the Labor Department reported that new applications filed for jobless benefits last week dropped by 40,000 to 329,000. The drop was credited to the end of a partial government shutdown in Puerto Rico, which ended unemployment for several individuals.
First time claims for state unemployment insurance benefits fell to a seasonally adjusted 329,000 in the week ended May 20, from an upwardly revised 369,000 claims the previous week, the Labor Department said.
A Labor Department analyst told AP claims from Puerto Rico, which had surged in recent weeks due to a funding crisis there that forced layoffs of local government employees, were not a significant factor in this week's initial claims.
However, the initial claims were still higher than the 315,000 forecast by Wall Street economists after the Labor Department initially reported 367,000 claims last week.