WASHINGTON — The economy tumbled at a 5.5 percent pace in the first quarter but appears to be doing better now, even though heavy layoffs persist.
The revised reading on gross domestic product, released Thursday by the Commerce Department, showed that the economy from January through March didn’t fall as deeply as the 5.7 percent annualized decline reported a month ago.
Economists expected the government would stick with its previous estimate.
A separate government report found new jobless claims jumped unexpectedly last week, while continuing claims for unemployment benefits rose more than expected. The data show jobs remain scarce even as the economy shows some signs of recovering from the longest recession since World War II.
The main forces behind the small upgrade in first-quarter GDP had nothing to do with an improving job market: Businesses didn’t cut stockpiles of goods as much, and imports dropped more sharply than previously estimated.
Meanwhile, the rebound in consumer spending was a little less energetic.
Consumers boosted their spending at a 1.4 percent rate, down from a 1.5 percent growth rate estimated last month. Still, it marked the strongest showing in nearly two years and a huge improvement from the fourth quarter, when skittish consumers slashed spending by the most in nearly three decades.
The worst financial crisis since the 1930s, a housing bust and hard-to-get credit have eaten into businesses’ sales and profits, forcing them to cut back production and jobs.
In the final quarter of last year, the economy plunged at a 6.3 percent annualized pace, the most in a quarter-century.
