Growth rate at 2.5 percent
The American economy quickened its pace early this year despite deep government cutbacks. The 2.5 percent annual growth rate in the January-March quarter was fueled by the strongest consumer spending in two years. Federal spending cuts, higher Social Security taxes and cautious businesses are likely to weigh on the economy in coming months.
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Friday's Commerce Department report on GDP showed consumers stepped up spending at an annual rate of 3.2 percent in the January-March quarter, the biggest jump since the end of 2010. Businesses that rebuilt stockpiles and a rise in home construction added to growth. Government spending sank at a 4.1 percent annual rate, led by a deep cut in defense.
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Wages up for some workers
When adjusted for inflation, the wages of low-paid workers have declined. But the wages for better-paid workers have grown more rapidly than inflation, a Labor Department report reveals. The national median wage in the first quarter of this year was $827 a week. In 2013 dollars, the median wage 13 years before was $819, an increase of about 1 percent.