Finance: GDP beats estimates in the first quarter,

Stronger consumer spending and exports led the upward revision to GDP.

The US economy grew faster than initially thought in the first quarter, according to the Commerce Department's third estimate of gross domestic product.

GDP, the value of everything produced in America, increased by 1.4%, a report released Thursday showed. Consumer spending and exports were revised higher, although the general picture of economic growth remained the same.

GDP was expected to be unrevised at 1.2%, according to Bloomberg. It was initially reported at 0.7%.

Some economists suspect that this underestimates the pace of growth in the US as the Commerce Department has done in every first quarter of this recovery. That's because of residual seasonality, a quirk that distorts how temporary factors like the weather are accounted for.

Fed participants who decide on monetary policy said in minutes of their May meeting that they thought seasonality at least played a role. Fed staff, however, said it reflected soft consumer spending and inventory investment, not residual seasonality.

The third estimate of GDP "will not be the final word on the subject," said Ian Shepherdson, the chief economist at Pantheon Macroeconomics, in a note on Thursday. "Indeed, there never will be a final word, because the numbers are revised indefinitely into the future. No wonder the Fed prefers to look at payroll growth as a better proxy for the state of the economy; you can never be sure that the GDP numbers are reliable, especially when looking at short periods."

Stronger consumer spending and exports led the upward revision to GDP. Read Full Story