The U.S. government slashed its estimate for fourth-quarter growth as consumer spending and exports were less robust than initially thought, leaving the economy on a more sustainable path of modest expansion.
Gross domestic product expanded at a 2.4% annual rate, the Commerce Department said on Friday. That was down sharply from the 3.2% pace reported last month and the 4.1% logged in the third quarter.
Economists polled by Reuters had expected growth would be cut to a 2.5% pace.
It is not unusual for the government to make sharp revisions to GDP numbers, as it does not have complete data when it makes its initial estimates. In fact, the latest figures will be subject to revisions next month as more information is received.
The revision left GDP just above the economy's potential growth trend, which analysts put somewhere between a 2% and 2.3% pace.
Consumer spending accounted for a large chunk of the revision after retail sales in November and December came in weaker than assumed.
Consumer spending was cut to a 2.6% rate, still the fastest pace since the first quarter of 2012. It had previously been reported to have grown at a 3.3% pace.
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