"Their budget holes are getting a lot smaller," says Jay Bryson, global economist for Wells Fargo.
Most of all, the job market is stronger than it was last year. Unemployment has fallen from 9.1 percent in August to 8.2 percent in March. The economy has added nearly 1.9 million jobs over the past year. More hiring is creating more pay and more spending — a cycle in which hiring and consumer spending reinforce each other and grow.
Economists note that Friday's report isn't the final word on first-quarter growth. It is just an initial estimate. The government will revise the figures in May and again in June.
Then in July, the growth figures will be tweaked yet again. That's when the government will revise its estimates of growth from 2009 through the first quarter of this year.
The picture could look brighter after the revisions. Two months ago, the government revised income and savings for the second half of last year. It showed Americans had earned and saved more than previously thought. That meant they had more money to spend.
Some economists expect a similar revision this year because job gains suggest that incomes might be higher.
This was the 11th quarter since the Great Recession officially ended in June 2009. The fastest rate of economic growth has been 3.9 percent in the first quarter of 2010. Normally, a much bigger bounce would follow a deep recession like the one the United States sank into in December 2007.
When the economy emerged from the recession of 1981-1982, for instance, growth hit an 8 percent annual pace for four straight quarters in 1983 and 1984.
The gross domestic product measures the output of all goods and services produced in the United States, from cars to electricity to manicures. GDP growth drives job creation, pay, corporate profits and stock prices.
As disappointing as the first-quarter numbers were, the U.S. economy still looks a lot stronger than most of the rest of the developed world. It's expected to grow perhaps 2.5 percent for the full year.
By contrast, Britain's economy will only grow 0.8 percent and Japan's about 2 percent, according to forecasts from the International Monetary Fund. Things are even worse in Europe. The 17 countries that use the euro as their currency are expected to see growth shrink 0.3 percent.
"Growth is an increasingly rare commodity in the global economy," says Jason Conibear of Cambridge Mercantile, which specializes in trading currencies. "But the US has got it."
AP Economics Writer Martin Crutsinger contributed to this report.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.