U.S. GDP rate rebounds to 3.3%

WASHINGTON - The U.S. economy, pulling out of a rough patch, grew at a suprisingly strong 3.3 percent annual rate in the spring, the Commerce Department reported yesterday.

The growth came largely from exports as American products benefited from a weak dollar in the April-to-June quarter. The dollar has since strengthened on foreign-currency markets.

But economic slowdowns overseas could make exports tail off. Moreover, at home, Americans now are hunkering down as the bracing effect of the spring federal tax-rebate checks wanes. The combination could plunge the country into another rut later this year.

"There will be heavy sledding for the U.S. economy during the next couple of quarters," predicted Lynn Reaser, chief economist at Bank of America Corp.'s Investment Strategies Group.

The second-quarter increase in the gross domestic product was the fastest pace in nearly a year. The 3.3 percent annual rate was much better than the government's initial estimate of a 1.9 percent pace and exceeded economists' expectations for a 2.7 percent growth rate.

The rebound followed two dismal quarters. The economy actually shrank in the final three months of 2007 - by a 0.2 percent annual rate - and barely budged in the first quarter at a minuscule 0.9 percent pace.

The growth in the spring was the best performance since the third quarter of last year, when the economy was chugging along at a brisk 4.8 percent pace.

But analysts predicted the second quarter would represent the high point for economic activity this year.

GDP measures the value of all goods and services produced within the United States and is the best barometer of the country's economic health.

For months, housing, credit and financial troubles have hammered the nation's economy.

In turn, employers have clamped down on hiring, driving the nation's unemployment rate up to 5.7 percent in July, a four-year high.

The Labor Department said yesterday that the number of people signing up for jobless benefits declined last week for the third straight week, but remained above 400,000 - an indicator of a slowing economy.

The biggest factor in the GDP's second-quarter rebound was robust sales of U.S. exports, which accounted for half of the gain in GDP. Exports grew at a 13.2 percent pace in the spring, more than double the 5.1 percent growth rate logged in the first quarter.

Imports, meanwhile, fell at a 7.6 percent annualized pace in the spring, as economic troubles in the United States crimped demand for foreign-made goods.