The US economy grew a touch faster at the end of last year than first thought, but still notched only half of the third quarter's sizzling pace as consumer spending eased, the government said today.
Despite the slowdown, the year closed with the strongest back-to-back quarters since the first half of 1984.
US gross domestic product, a broad measure of the nation's economic health, rose at a 4.1 per cent annual rate in the fourth quarter, just above the 4 per cent gain initially reported a month ago, the US Commerce Department said.
Economists on Wall Street had expected GDP growth to be lowered to 3.6 per cent, in part because imports were stronger than first estimated.
Markets largely shrugged off the report.
While solid by historic standards, the pace of growth in the final three months of last year marked a sharp slowdown from the 20-year-high 8.2 per cent rate logged in the third quarter.
The slower pace in the October-December period came as consumers curbed their spending after splurging in the third quarter, when pocketbooks were fattened with tax cuts. Spending on big-ticket durable goods fell 0.1 per cent, the first quarterly decline in over three years.
The department said it nudged up the fourth-quarter GDP reading because business spending on equipment and software was more robust than first thought, firms added to inventories at a faster pace and exports were stronger.
Those changes were just enough to offset the drag from greater imports, which subtract from growth.
"In short, a solid quarter, especially in the light of the tax cut-fueled surge in (third quarter) activity," said Mr Ian Shepherdson, chief US economist at High Frequency Economics.