The U.S. registered solid economic growth in the final three months of last year, buoyed by rising exports and the biggest increase in consumer spending in three years, the Commerce Department said Thursday (Jan. 30).
The Los Angeles Times reported that the economy’s 3.2% annualized growth rate in the fourth quarter was in line with analysts’ expectations and suggests that there was good momentum heading into this year. The pickup in personal spending was particularly encouraging as that accounts for more than two-thirds of American economic activity.
Business spending for equipment accelerated, but housing investment fell in the quarter. And companies continued to build up inventory of goods, which could weigh on future production and growth if sales don’t keep up.
For all of 2013, officials said, the economy expanded at a sluggish 1.9% annual rate, down from 2.8% in 2012. But the slowdown came mainly from weakness early last year; economic growth accelerated in the third quarter, to 4.1%, although more than one-third of that percentage increase came from a restocking of goods.
Underlying private-sector demand was stronger in the fourth quarter as consumer spending jumped 3.3%, compared with a 2% gain in the third quarter. Consumption was lifted by solid holiday sales as people bought more clothes and spent more on eating out.
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