The first quarter of 2002 saw the fastest growth in the US economy for two years, according to data released Friday by the Commerce Department.

Fuelled by increases in exports and higher spending, both by consumers and the government, the national economy soared at a seasonally-adjusted rate of 5.8%. Another significant factor was the slowdown in the rate of inventory liquidation.

However, the Commerce Department counselled caution about the sustainability of the seemingly miraculous recovery and President Bush, while conceding that the numbers were encouraging, warned “we’ve got more to do”.

But other elements in the department’s report stoked anxiety about growth, reflecting this in a weakened dollar. There was an abrupt reversal from 2001’s Q4 surge in durable products spending, accompanied by an ongoing slide in investment – the latter deemed by Federal Reserve chairman Alan Greenspan as “critical to recovery”.

And post-September consumer confidence, as measured by the University of Michigan’s confidence index, confounded hopes by slipping from 95.7 in mid-March to 93 by mid-April.

However, those in the economic driving seat can take some comfort from the fact that the gross domestic product data indicates that measured inflation has fallen below 1 per cent.

Data sourced from: Financial Times; additional content by WARC staff