New Numbers Show Signs Of Economic Growth

The economic headline today was clear: We're getting there.

Spring has sprung, and some real signs of economic progress are beginning to take root.

The economy grew at an annual rate of 3.2 percent in the first quarter -- a much rosier picture than the negative 6.4 percent rate from one year ago.

"After the single biggest economic crisis in our lifetimes, we're heading in the right direction," said President Obama said in the Rose Garden today.

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The brightest ray of sunshine is a 3.6 percent jump in consumer spending. That's the biggest boost since 2007 and the third straight quarterly gain. It's also a major improvement from the fourth quarter report, when consumer spending only grew 1.6 percent.

Americans are buying things again and they are big things like dishwashers, cars, and furniture.

"Consumption is about 70 percent of the U.S. economy, so it's impossible to have a vigorous recovery without a boom in consumer spending," says Glen Hubbard, Dean of the Columbia Business School, "And consumer spending also reflects consumers' views about their future."

Shoppers are feeling more optimistic too.

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"We probably wouldn't have shopped for anything that wasn't a necessity about a year ago," one told us, "Now we can do a little bit more fun shopping now."

Businesses are buying too.

Their spending on equipment and software rose more than 13 percent.

And for the first time since the recession, they're spending to stock their shelves -- a huge $31 billion to fill inventories.

The jobs number is slowly creeping up too. A net total of 162,000 were created in March, the most in three years.

VIDEO: WSJ.coms Simon Constable on the positive signs that the economy is improving. Play

All of this is genuinely good news. The problem though, is that for some Americans, it's just not good enough.

"For millions of Americans, our friends, neighbors and fellow citizens, ready and willing to get back to work, 'You're hired' is the only economic news they're waiting to hear," said the President.

Despite all the good news, unemployment is still hovering around 10 percent, and to reduce that by just 1 percent, economic growth would have to total 5 percent for the year.

We're not there yet.

The growth numbers for the first quarter were good, but down from the 5.6 growth rate in the last quarter of 2009, and a bit lower than Wall Street had expected. The Dow Jones Industrial Average dropped 158.71 points on the news, closing the day at 11,008.61.

"We have to create 100,000 to 150,000 jobs a month just to stay even," says Hubbard. "That bounce-back is just going to take some time."

And there's still bad news from some parts of Europe, particularly Greece, whose bonds were downgraded to junk status yesterday.

But the hope is if American consumers keep buying stuff, businesses will have to hire more people to make stuff. And if businesses keep buying equipment, they'll have to hire people to use it.

The Associated Press contributed to this report.

For more on this story tune in to World News with Diane Sawyer 6:30pm ET.