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U.S. GDP grew faster in fourth-quarter

February 29, 2012

Economic growth was stronger than originally thought at the end of 2011 as consumers increased their spending and businesses stocked up their inventories.

Gross domestic product, the broadest measure of the nation’s economy, grew at a 3% annual rate in the fourth quarter of 2011, the Commerce Department said Wednesday.

The government had initially said the economy grew at a 2.8% rate. The Commerce Department estimates the GDP figures three times, and Wednesday’s report was its second estimate.

That’s a major improvement from a 1.8% growth rate in the prior quarter, and the fastest growth since the second quarter of 2010.

Consumer spending picked up at an annual rate of 2.1% in the fourth quarter, slightly higher than originally reported. Spending on long-lasting goods, especially motor vehicles, helped drive GDP higher, as did increased spending at restaurants and hotels.

Meanwhile, businesses increased their inventories by $54.3 billion, after cutting back on their stock the prior two quarters.

Most economists are predicting U.S. economic growth slowed slightly in the first quarter, for this very reason.

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