The U.S. economy expanded at a 2.4% annual pace in the fourth quarter instead of 3.2% as originally reported, mainly because consumers did not spend quite as much, the government said Friday. The revised figure matched the MarketWatch forecast. The increase in consumer spending was lowered to 2.6% from 3.3%, mostly because Americans spent less than initially calculated on big-ticket items such as autos, appliances and electronics. Reduced estimates for export growth and inventory spending and a sharper decline in government spending also contributed to the downward revision in gross domestic product. Exports rose 9.4% instead of 11.4% and inventories climbed $117.4 billion and not $127.2 billion as previously reported. Government spending fell a stiffer 5.6% instead of 4.9% because states and local governments actually cut outlays instead of increasing them. Excluding inventories, final sales of American-made goods and services was trimmed to 2.3% from 2.8%. Yet company spending on equipment - a key signal of improved business conditions - was revised up to show a 10.6% gain vs. 6.9%. Inflation as measured by the PCE index was little changed, rising at a 1% annual pace or by 1.3% excluding food and energy.
Source: Marketwatch
Source: Marketwatch
