WASHINGTON - The U.S. economy grew at a slightly faster rate in the fourth quarter than previously estimated, boosted by stronger consumer spending. Consumers may be providing more lift to the economy in the current January-March period.
The Commerce Department said Friday that the economy grew at a modest 1.4 percent annual rate in the October-December period. That was better than the 1 percent growth rate estimated a month ago but still below the 2 percent growth turned in during the July-September quarter.
Most of the strength in the revision came from an upward boost to consumer spending, particularly involving recreation. Exports also were not as weak as previously thought.
Many economists think growth as measured by the gross domestic product is accelerating in the current quarter to a 2 percent annual rate. But some analysts have been downgrading their estimates of late, reflecting some weaker-than-expected economic data.
Analysts at forecasting firm Macroeconomic Advisers, for example, on Thursday reduced their forecast of first-quarter GDP growth to a 1.5 percent annual rate after the release of a weak report on new orders for long-lasting manufactured goods. Those orders dropped 2.8 percent in February.
That decline was seen as a sign that the nation's manufacturing sector is still struggling with weakness overseas and a strong dollar, which has made American-made products more expensive in foreign markets.
This year, continued strong gains in hiring could boost household incomes and support solid increases in consumer spending, which accounts for about 70 percent of economic activity.
This month, the Federal Reserve left its key policy rate unchanged after having raised it from a record low in December. Fed officials also scaled back their expectations for the number of rate hikes this year from four to two.
The officials said they thought the global economy and financial markets still pose risks even though financial markets have stabilized since the year began. Stocks had nosedived after investors worried about how steep the slowdown would be in China, the world's second-largest economy.
Analysts have forecast that for 2016 as a whole, the economy will grow around 2 percent. That would be down from last