The U.S. economy continued to gain steam in the fourth quarter of 2011 but failed to reach the pace of expansion most economists had predicted.
The 2.8 percent growth in the final quarter of 2011, reported by the Commerce Department on Friday, was markedly higher than the 1.8 percent growth posted for the third quarter.
However, the pace of growth fell short of the 3.1 percent projected by most economists in what may be a sign that the economic recovery is still stagnant.
The Commerce Department said that the acceleration in the pace of GDP growth primarily reflected an upturn in private inventory investment as well as faster consumer spending growth.
On the other hand, the pace of growth was limited by a downturn in federal government spending and an increase in imports, which are a subtraction in the calculation of GDP.
Paul Ashworth, Chief U.S. Economist at Capital Economics, noted that the acceleration in the pace of GDP growth suggests that the economic recovery is gathering momentum.
"However," he added, "the much bigger than expected positive contribution from inventories in Q4 leaves us even more convinced that growth will slow again to a sub-2% rate in Q1 of this year."
Computer sales remained relatively strong, contributing 0.18 percent to the overall GDP growth, though that level is below the 0.22 percent in the third quarter.
Motor vehicle sales also contributed to the GDP growth, adding 0.3 percent to the overall growth - an increase from the 0.12 percent contributed to the third quarter.
Consumer spending continued to increase in the fourth quarter, rising 2 percent compared to the 1.7 percent increase in the third quarter. Much of the growth was due to a 14.8 percent increase in durable goods purchases, while non-durable goods increased by 1.7 percent.
Federal government spending, which had increased by 2.1 percent in the third quarter, fell by 7.3 percent in the fourth quarter amid a 12.5 percent drop in defense spending.
Personal income also increased more rapidly in the fourth quarter, rising 2.6 percent compared to the 0.8 percent increase posted in the third quarter.
Additionally, in a sign that U.S. consumers are willing to open their wallets, personal saving as a percentage of disposable personal income fell slightly to 3.7 percent from the 3.9 percent posted in the third quarter.
On an annual basis, GDP increased by 1.7 percent in 2011, significantly slower than the 3 percent growth posted in 2010.
The deceleration in GDP for 2011 was primarily the result of shrinking private inventory investments, lower levels of federal spending and decreased exports. Partially offsetting those factors were an increase in nonresidential fixed investment and shrinking imports.
The price index for gross domestic purchases increased 2.5 percent in 2011, compared with an increase of 1.5 percent in 2010.
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