US economy grew at a 2.5 percent rate in first quarter

The US economy grew in the first quarter, accelerating at a rate of 2.5 percent.

According to the Commerce Department, the overall economy rebounded from the last quarter's 0.4 percent growth rate.

The better first-quarter results were helped by a recovering house market, fast-moving economic activity and job growth early in the period. Industrial output also increased by 5 percent annualized during the first three months of the year.

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Consumer spending was up for the first quarter too, despite the fears that the amount people would be willing to spend would be affected by the lapse of the temporary payroll tax holiday at the beginning of the year. But it is unclear if consumers will continue to spend after the tax hike takes effect.

Growth is expected to slow in coming months as the impact of federal budget cuts hits.

While the first-quarter numbers show an exponential growth, they didn't, however, meet expectations of a 3 percent growth rate, signaling a fourth straight spring slump.

Employers added only 88,000 jobs in the last month of the first quarter, versus an average of 208,000 in January and February respectively.

Activity in the manufacturing and service sectors slowed in March, and retail sales and orders for durable goods, like airplanes and appliances, fell unexpectedly.