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Economic growth improves slightly

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Matthew Hansen
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WASHINGTON -- The U.S. economy's slowdown in growth at the beginning of the year wasn't quite as bad as first thought, thanks to a bigger boost from housing and less drag from business investment and trade.

The gross domestic product, the broadest measure of economic output, grew at an annual rate of 0.8 percent in the first quarter, the Commerce Department said Friday, the same day another report suggested that Americans were more optimistic about the economy in May.The University of Michigan said Friday its index of consumer sentiment rose to 94.7 in May, the highest in nearly a year.

At the beginning of the year, the economy was held back by turbulence in financial markets and global economic problems.

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Ian Shepherdson, chief economist at Pantheon Macroeconomics, said GDP growth in the current quarter could be as strong as 3 percent.

The plunge in spending on oil and gas exploration has been a major source of weakness.

The unemployment rate remained at a low 5 percent, down by half from the 10 percent high hit in the fall of 2009 when the economy was struggling to emerge from its worst economic downturn since the 1930s.

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