The U.S. economy grew at an annual rate of 6.4 percent in the first quarter of 2021, the Commerce Department reported Thursday in its third and final estimate.

Upward revisions to nonresidential fixed investment, private inventory investment, and exports were offset by an upward revision to imports, which are a subtraction in the calculation of gross domestic product (GDP), according to the latest estimate released by the department's Bureau of Economic Analysis, one month after the second estimate.

The increase in real GDP in the first quarter reflected increases in personal consumption expenditures (PCE), nonresidential fixed investment, federal government spending, residential fixed investment, and state and local government spending, which were partly offset by decreases in private inventory investment and exports, the bureau said, adding that imports increased.

"The increase in first quarter GDP reflected the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic," the bureau said.

At its two-day policy meeting last week, the U.S. Federal Reserve decided to keep its benchmark interest rates unchanged at the record-low level of near zero, reiterating inflation surge is "transitory" and resisting sending out signals on the timeline to taper its bond buying program.

Median forecast among Fed officials called for a 7.0-percent GDP growth by year-end, 0.5 percentage point up from the March projection, according to the Fed's latest Summary of Economic Projections.

Inflation, meanwhile, is expected to climb to 3.4 percent by year-end, 1 percentage point up from the March projection. Core PCE price index, the Fed's preferred inflation measure, is expected to rise to 3 percent by year-end, up 0.8 percentage point from the March projection, and well above the Fed's 2 percent long-term goal.

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