Washington: Consumer spending probably accelerated in the first quarter, shepherding the US expansion into 2010, economists expect a report this week to show.

Gross domestic product grew at a 3.4 per cent annual pace after increasing at a 5.6 per cent rate in the last three months of 2009, according to the median estimate of 67 economists surveyed by Bloomberg News. Household purchases may have climbed by the most in three years.

"Jobs are the critical component of the entire scenario," said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. "The signs do point to impending employment gains."

Improving demand boosts the odds the recovery will be self-sustaining, benefiting companies such as Starbucks, as rising sales lead to additional hiring, which in turn fosters even more spending. A lack of inflation gives Federal Reserve policymakers the green light to keep interest rates low when they meet this week to ensure the world's largest economy continues to grow.

Central bankers will keep the target for the benchmark borrowing cost on overnight loans between banks near zero at the conclusion of their two-day meeting on April 28, economists surveyed forecast.

Fed chairman Ben Bernanke told Congress on April 14 that high unemployment and weak construction were among the "significant restraints" on the pace of growth.

At their March 16 meeting, central bankers said economic conditions are likely to warrant "exceptionally low levels of the federal funds rate for an extended period".

The Commerce Department's advance estimate of first-quarter GDP is due on April 30. The world's largest economy grew at the fastest pace in six years during the last three months of 2009 after expanding at a 2.2 per cent rate in the third quarter.

For all of 2009, the economy shrank 2.4 per cent in 2009, the worst single-year performance since 1946.

Consumer spending probably increased at a 3.1 per cent annual rate last quarter, almost double the 1.6 per cent pace of the previous three months, the GDP report is also projected to show.

Households led the expansion last quarter, taking the baton from gains in production that reflected efforts to stabilise stockpiles. A swing to smaller inventory reductions accounted for 3.8 percentage points of growth in the fourth quarter.

That contribution, while diminished, probably continued last quarter as companies boosted stockpiles for the first time in two years, according to economists such as economist Aaron Smith of Moody's Economy.com.

Inventories climbed 0.5 per cent in February, the fourth gain in five months, according to Commerce Department data.

Nigel Gault, chief US economist at IHS Global Insight in Lexington, Massachusetts, is among those saying more jobs are a necessary component of a sustained recovery. Payrolls rose by 162,000 in March, the most in three years, the Labour Department reported April 2. The unemployment rate was 9.7 per cent for a third month and has not increased since reaching a 26-year high of 10.1 per cent in October.