The department's report on gross domestic product (GDP) - the total of all goods and services produced - said growth kept pace with the previous three months.

The Commerce Department also said consumer spending, which accounts for about two-thirds of U.S. economic activity, rose at the smallest rate (1 percent) since the second quarter of 2001.

There have been concerns the U.S economy was slipping into a recession - a period defined by two quarters of negative economic growth.

The report comes as the Federal Reserve, the U.S. central bank, is expected to announce another cut in interest rates when it concludes a two-day meeting Wednesday in Washington.

Observers say the central bank's Open Market Committee will likely impose a cut of a quarter of a percentage point, lowering the overall rate to just two percent, to help stimulate the economy.

The world's largest automaker, General Motors, reported today a net loss of almost $3.3 billion in the first three months of the year, hurt by falling vehicle sales in the U.S. and its flagging financing division.

Meanwhile, a private report based on payroll data by employer services company ADP found U.S. employers added 10,000 jobs in April. A separate report from the U.S. Labor Department found the costs to hire and retain workers grew at a slower pace (.7 percent) in the first quarter.

Source: VOA News