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ECONOMY GROWS AT 3.4% RATE, THANKS TO CONSUMER SPENDING

SHARE ECONOMY GROWS AT 3.4% RATE, THANKS TO CONSUMER SPENDING

The economy grew at a healthy 3.4 percent annual rate in the first three months of this year, led by surprising continued strength in consumer spending, the government said Wednesday.

While the economy slowed dramatically from the booming 7 percent growth rate at the end of last year, analysts say the pace of expansion was solid if unspectacular. Many expect the economy will at least duplicate the first three months' performance in the current quarter that ends Thursday.The Commerce Department a month ago estimated that the gross domestic product, the total value of all goods and services produced in the United States, rose 3 percent in the first quarter of 1994. Wednesday's upward revision exceeded expectations.

The Commerce Department said it was due to an additional $5.6 billion in consumer spending and $2.3 billion in business investment. Those increases more than offset a drop in government spending and a decline in net exports.

"It doesn't fundamentally change my view that the strength of the economy is dissipating somewhat," said economist Christopher Probyn of DRI-McGraw Hill, a forecasting service in Lexington, Mass. But he said the upward revision could signal a trend that influences the Federal Reserve to again raise interest rates.