A new government report says the U.S. economy during the past three months grew at its fastest pace in more than a year.

The report Friday, from the Commerce Department says the U.S. economy expanded at a 3.4 percent annual rate in the second quarter of this year. That is the fastest rate since the first quarter of 2006, and was spurred by strong business and government spending.

It also is a significant increase from the 0.6 percent growth rate logged in the first quarter.

In Washington, President Bush hailed the report following a meeting with his economic advisers. He said economic growth benefited from increased exports by U.S. farmers and manufacturers.

Mr. Bush said increased export business has fueled job growth in America.

The report also included a closely watched gauge of inflation, which slowed considerably. So-called "core" prices, which exclude volatile food and energy costs, rose at a moderate 1.4 percent rate. That is a full percentage point lower than it was in the previous quarter.

The U.S. central bank has said the risk of inflation is one of its top concerns.


Some information for this report was provided by AP and Reuters.