US economy grew surprise 1% in fourth quarter

The US economy grew at an annual rate of 1.0 percent in the fourth quarter, far stronger than expected, according to the Commerce Department's upwardly revised data released Friday.

The department's previous estimate of 0.7 percent fourth-quarter growth was expected to be cut to 0.4 percent amid signs of sluggishness after a 2.0 percent expansion in the third quarter.

While the slowdown in consumer spending, the engine of the US economy, was essentially confirmed for the fourth quarter, several other growth factors were less weak than first thought.

Business investment, notably on equipment, fell less than previously estimated. Inventories weighed less on the economy.

Consumer spending, which accounts for two thirds of gross domestic product, rose 2.0 percent, not the 2.2 percent previously estimated, and a marked slowdown from a 3.0 percent rise in the third quarter.

Reflecting the slowing global economy and the strong dollar that makes US exports more expensive, the decline in exports was steeper than seen initially.