The US economy grew a robust 5.9 percent in the fourth quarter of last year, stronger than previously estimated and beating market expectations, revised government data showed Friday.
Growth in gross domestic product -- a broad measure of the country's goods and services output -- initially had been estimated at a 5.7 percent annualized rate compared with the third quarter of 2009. The Commerce Department's upward revision surprised most analysts who had expected the second GDP estimate to remain unchanged. The powerful surge in the October-December quarter remained the strongest since 2003 and followed a 2.2 increase in GDP in the third quarter, the first economic growth after four consecutive quarters of contraction. The acceleration in GDP growth largely reflected increases in private inventory investment, nonresidential fixed investment and exports that more than offset declines in spending by consumers and the federal government, the Commerce Department said. Inflation remained tame, with the GDP price index revised down 0.2 percentage points to 1.9 percent. Prices rose 1.3 percent in the third quarter. So-called "core" inflation, excluding food and energy prices, climbed 1.3 percent following a 0.3 percent rise in the third quarter. Consumer spending, which drives two-thirds of US economic activity, increased 1.7 percent, slowing from a 2.8 percent rise in the third quarter. "The second GDP release for the fourth quarter lays out the path for the economy over 2010," said Augustine Faucher at Moody's Economy.com. "Inventories will continue to provide a boost to growth in the first half of this year, as firms need to add to their stocks now that demand has firmed." For the full-year 2009, the Commerce Department said the economy contracted an unrevised 2.4 percent, the worst performance since 1946, due to the collapse in economic activity in the early part of the year. In 2008 the economy grew a weak 0.4 percent amid a global financial crisis that began with a mortgage crisis in the US housing sector. http://news.yahoo.com/s/afp/20100226/pl_afp/useconomygrowth
