1st-quarter gain in output better than early US tally

The economy expanded at an encouraging 8.4 percent annual rate in the first three months of the year -- a surprise to most forecasters. The value of the gross national product --the nation's output of goods and services -- was revised upward for January through March from 6.5 percent in a major change of the data originally reported by the Commerce Department a month ago.

At a seasonally adjusted annual rate, GNP grew to $2.853 trillion in the first quarter. It was the largest increase in GNP since the second quarter of 1978, when it grew by 9 percent.

The encouraging news comes on top of Commerce Department figures showing a surge in private single-family housing construction that carried overall housi ng starts for April up by 4.2 percent.