Economic growth revised up to 0.8 percent

Economic growth revised up to 0.8 percent

The U.S. economy grew at a slightly faster pace during the first three months of the year, with housing gains providing a boost.

Economic growth, or gross domestic product, grew at an annual rate of 0.8 percent in the January–March quarter, modestly better than the 0.5 percent pace that was first reported, the Commerce Department said Friday.

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First-quarter growth slowed sharply on concerns about the pace of global growth and a slowdown in China's expansion that rocked financial markets.

“Strong growth in residential investment boosted real GDP growth, but weakness in business investment and exports, exacerbated by weak foreign demand and low oil prices, weighed on growth,” Jason FurmanJason FurmanTrillion-dollar deficits as far as the eye can see, and hardly a voice of caution to be heard Billionaires paid lower tax rate than working class for first time in US history: study Economy adds 130K jobs in August, falling below expectations MORE, chairman of the Council of Economic Advisers, said in a statement.

Low energy prices have hurt the U.S. sector, while a strong dollar has made U.S. exports more expensive overseas.

Meanwhile, residential construction grew at a 17.1 percent rate.

Housing experts are upgrading their forecasts for the year as early numbers from the spring buying season are coming in better than expected and are being fueled mostly by more jobs and low mortgage rates.

Furman highlighted growth in the nation's labor market and a pick up in wages so far this year.

"But there is more work to do, and the president will continue to call on Congress to support policies that will boost our long-run growth and living standards, including policies to support innovation and investments in infrastructure and job training and to promote greater competition across the economy, as well as high-standards free trade agreements like the Trans-Pacific Partnership (TPP)," Furman said.

President Obama spent the past week promoting the geopolitical and economic benefits of the TPP during his trip to Vietnam and Japan, both partners in the trade deal.

Despite the slow start to the year, the forecast for the April to June quarter is looking up, with estimates running about 2.5 percent.

“While first-quarter GDP remained low despite the upward revision, there are a number of reasons to anticipate a rebound in the second quarter,” said Curt Long, chief economist with the National Association of Federal Credit Unions.

“Incoming data has been noticeably stronger, the drags from low oil prices and a strong dollar were less than previously estimated, and there is still a possibility that the government’s seasonal adjustment continues to underestimate GDP in the first quarter while boosting it in subsequent quarters," Long said.

The recent string of positive data should prompt the Federal Reserve to raise rates no later than July, Long said.

Since the recovery started in June 2009, the first quarter of each year has produced lackluster results followed by a stronger spring period.

Economists have struggled to explain the ups and downs of growth numbers outside of global shocks despite little change in underlying factors such as a steady pace of jobs growth.

The economy added 160,000 jobs in April, and the May numbers are expected out next Friday.

Some economists have said that the roller-coaster growth figures reflect the difficulty of the government to capture all the necessary data, especially from the booming digital economy.

Mark Zandi, chief economist with Moody's Analytics, has said that the labor market may be the best place to take the pulse of the economy.

The third and final estimate for first-quarter growth is due out June 28.