The U.S. economy grew more quickly than previously estimated in the fourth quarter as businesses maintained fairly solid spending and restocked shelves to meet rising demand, while corporate profits increased 3.3%, a government report showed on Friday.
Gross domestic product growth was revised up to an annualized rate of 3.1%, the Commerce Department said in its final estimate, close to its initial estimate of 3.2% published two months ago and up from its tally of 2.8% made in February.
Economists had expected GDP growth, which measures total goods and services output within U.S. borders, to be revised up to a 3% pace. The economy expanded at a 2.6% rate in the third quarter. For the whole of 2010, the economy grew 2.9%, while corporate profits grew 20.4%, the most since 2004.
Data so far suggest the economy maintained this growth pace in the first quarter, but there are concerns that rising oil prices could crimp consumer spending and slow the economic recovery.
The pick-up in growth has been acknowledged by the Federal Reserve, which injected massive amounts of money into the economy to stimulate demand. The U.S. central bank is expected to conclude its $600-billion-U.S. government bond buying program at the end of June.
The government raised fourth-quarter growth estimates to reflect stronger business spending and inventory accumulation than previously forecast.
Business investment rose at a 7.7% rate instead of 5.3%, lifted by spending on equipment and software, as well as on structures. Spending grew at a 10% pace in the third quarter.
