The GDP data shows a US economic growth rate of 2% in the first quarter

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The US economy grew faster earlier this year than previously thought.

Gross domestic product, adjusted for inflation, expanded at an annual rate of 2 percent in the first three months of the year, Department of Commerce Thursday said. That was a significant upward revision from the 1.1 percent growth rate in preliminary data released in April. (An earlier review, released last month, showed a slightly stronger rate of 1.3 percent.)

An alternative measure of growth, which is based on income rather than output, painted a different picture, showing the economy contracted for the second consecutive quarter. This measure has also been revised upward from the previous estimate.

The report highlighted the surprising resilience of the country’s economic recovery, which has held steady despite high inflation, rapidly rising interest rates and persistent predictions of a recession by many Wall Street forecasters.

Gregory Daco, chief economist at EY, the consulting firm formerly known as Ernst & Young, wrote in a note to clients. “This leads many to rightfully wonder whether a long overdue recession is really inevitable.”

Consumers are driving the recovery with their spending, which increased at a rate of 4.2 percent in the first quarter, up from a 1 percent rate in late 2022 and faster than the 3.7 percent rate initially announced in April. This spending, supported by a strong labor market and rising wages, has helped offset declines in other sectors of the economy such as business investment and housing.

What it means: Complications for the Federal Reserve.

The continued strength of the consumer economy poses a dilemma for policymakers at the Federal Reserve, who have raised interest rates in an effort to curb inflation without causing a recession.

On the other hand, data from the first quarter offers some signs of success: economic growth has slowed but not halted, even as inflation has eased significantly since the middle of last year.

But many forecasters, both inside and outside the central bank, are skeptical that inflation will continue to fall as long as consumers are willing to open their wallets — meaning policymakers are likely to take further steps to curb growth. At their meeting this month, Fed officials left interest rates unchanged for the first time in more than a year, but indicated they were likely to resume raising rates in July.

The Chairman of the Federal Reserve, Jerome H. Powell, at a conference in Madrid on Thursday, noted that inflation has repeatedly defied expectations of a slowdown.

“We’ve all seen inflation – time and time again – appear to be more persistent and stronger than we expected,” he said.

What’s next: income and spending data.

Mr. Powell and his colleagues will get more updated evidence of their progress on Friday, when the Commerce Department releases data on personal income, spending and inflation from May.

Jenna Smyalek Contribute to the preparation of reports.