The biggest gain in consumer spending in a year probably helped the U.S. economy keep expanding in the first quarter even as fuel costs climbed, economists said before a report this week.
Gross domestic product, the value of all goods and services the nation produced, rose at a 2.5 percent annual rate after advancing 3 percent in the previous three months, according to the median forecast of 72 economists surveyed by Bloomberg News before the Commerce Department’s April 27 release. Consumer purchases that account for about 70 percent of the economy climbed by the most since the end of 2010, the survey showed.
Job creation and warmer winter weather helped Americans overcome higher prices at the gas pump as auto sales powered ahead and retailers enjoyed more foot traffic. At the same time, the pace of growth may not be enough to convince Federal Reserve policy makers meeting this week to stray from their plan to keep borrowing costs low through 2014.