The U.S. economy, surpassing the $5 trillion mark for the first time, expanded at a robust annual rate of 5.5 percent in the first three months of 1989, the fastest pace in more than a year, the government reported Wednesday.
The Commerce Department said that almost half of the increase in the gross national product came from a statistical catch-up from last year's drought.But even discounting this bookkeeping factor, the GNP, representing the country's total output of goods and services, advanced at a 3 percent annual rate, down only slightly from a 3.5 percent non-farm growth rate in the final three months of 1988.
The Bush administration hailed the GNP report as good news that the economy is continuing to expand at a healthy rate.
Officials noted in particular the fact that the trade deficit, which had been widening for two consecutive quarters, showed improvement again in the first three months of the year while business investments rose at the fastest pace since last spring.
"There is nothing to indicate a recession in 1989 from these numbers," J. Antonio Villamil, the Commerce Department's chief economist, said at a news briefing.