WASHINGTON (AP) ― Americans shrugged off higher taxes to lift the U.S. economy at the start of the year. Government spending fell, though, and the impact of the tax increases along with federal budget cuts could slow growth later this year.

Economic growth accelerated to a 2.5 percent annual rate in the January-March quarter, the Commerce Department said Friday. That was up from an anemic 0.4 percent annual growth rate in the October-December quarter.

Consumer spending surged at an annual rate of 3.2 percent ― its biggest jump since the end of 2010. Growth was also helped by businesses, which responded to the greater demand by rebuilding their stockpiles. And home construction rose further.

Government spending sank at a 4.1 percent annual rate, led by another deep cut in defense spending. The decline kept last quarter’s increase in economic growth below expectations of a 3 percent rate or more.

Many economists say they think growth as measured by the gross domestic product is slowing in the April-June quarter to an annual rate of just 2 percent. Most foresee growth remaining around that subpar level for the rest of the year. The first-quarter growth figures will also be revised twice more based on more complete data.

Sal Guatieri, senior economist at BMO Capital Markets, predicts an annual growth rate of 2 percent for the April-June quarter and a 3 percent rate in the second half of the year.

“The second-half acceleration will be supported by improved household finances, pent-up demand for autos and the on-going recovery in housing,” Guatieri says. “We are seeing significant housing-related consumer purchases in such areas as furniture.”

GDP is the broadest gauge of the economy’s health. It measures the total output of goods and services produced in the United States, from haircuts and hamburgers to airplanes and automobiles.