THE U.S. ECONOMY GREW AT A REVISED 5.6 PERCENT ANNUAL RATE IN THE FIRST QUARTER AS THE FASTEST PACE OF GROWTH IN 2-1/2 YEARS GENERATED ROBUST CORPORATE PROFITS, THE COMMERCE DEPARTMENT SAID ON THURSDAY ACCORDING TO REUTERS. THE DEPARTMENT PUSHED ITS ESTIMATE OF FIRST-QUARTER GROWTH IN GROSS DOMESTIC PRODUCT UP FROM 5.3 PERCENT IT REPORTED A MONTH AGO. BUT THE CORE PERSONAL CONSUMPTION EXPENDITURES PRICE INDEX WAS UNREVISED AT UP 2 PERCENT, SLOWING FROM A 2.4 PERCENT GAIN IN THE FOURTH QUARTER AND IMPLYING CONTROLLED INFLATION. GROWTH HAS SLOWED SINCE THE FIRST QUARTER BECAUSE HIGHER GASOLINE PRICES AND INTEREST RATES HAVE NIPPED AMERICANS IN THE POCKETBOOK, WHILE SLOWER RATES OF APPRECIATION IN HOUSING PRICES ARE EXPECTED TO HEIGHTEN CAUTION ABOUT SPENDING. FIRST-QUARTER GDP GROWTH WAS MORE THAN TRIPLE THE 1.7 PERCENT PACE POSTED IN LAST YEAR'S FOURTH QUARTER AND WAS THE STRONGEST SINCE 7.2 PERCENT IN THE THIRD QUARTER OF 2003. PAUL MCCULLEY, MANAGING DIRECTOR OF BOND FUND PIMCO, TOLD A CHICAGO INVESTMENT CONFERENCE THE ROUSING 5.6 PERCENT FIRST-QUARTER RATE OF EXPANSION WAS "PROBABLY THE HIGHEST QUARTER YOU'LL SEE FOR YEARS" BECAUSE GROWTH WAS SLOWING. ON THURSDAY, THE FEDERAL RESERVE ANNOUNCED IT WAS RAISING ITS TRENDSETTING FEDERAL FUNDS RATE ANOTHER QUARTER PERCENTAGE POINT TO 5.25 PERCENT -- A 17TH STRAIGHT HIKE -- BUT NOTED RECENT SIGNS THAT "ECONOMIC GROWTH IS MODERATING." FED POLICY MAKERS SAID THAT, WHILE SOME INFLATION RISKS REMAIN, SLOWER GROWTH SHOULD EASE INFLATION PRESSURES, RAISING HOPES ITS PROLONGED RATE-RISING CAMPAIGN WAS NEAR AN END. --MORE 30/06/2006 00:10 ت م
