Prometheus 6

Inflation Picks Up as Economy Expands
By KENNETH N. GILPIN

Published: April 29, 2004

The American economy expanded at a solid 4.2 percent rate in the first three months of the year, the Commerce Department reported today, but growth was somewhat slower than economists had expected and new signs emerged that inflationary pressures were building.

The report on economic growth added weight to the case that the Federal Reserve would raise interest rates later this year before the November elections. But some analysts say policy makers at the central bank are unlikely to act before their August meeting because the economy does not appear to be expanding at too torrid a pace and inflation, while rising, is moving off a very low level.