The U.S. economy grew at a 3.2% annualized rate in the first quarter of the year — a faster pace than the previous quarter's 2.2% and significantly more than the 2.1% economists were expecting, the Commerce Department said on Friday, thanks to strong exports and consumer spending.

Why it matters: Concerns about a U.S. economic slowdown have subsided, given the bounce back in recent economic indicators. This blowout GDP report — though subject to revision — shows that the economic cycle might have more room to run, putting the Federal Reserve, which has backed off on raising rates, in a tough spot.

What to watch: Economists say the underlying data points that fueled growth in the first quarter may fade later in the year.

Go deeper: Global economic whiplash