The U.S. economy grew at a 2.9 percent annual rate in the final three months of 2017, the Commerce Department said Wednesday. That's slightly faster than the previous 2.5 percent growth estimate, but slower than the 3.2 percent pace of the third quarter.
Overall, the economy grew 2.3 percent last year, compared with 1.5 percent in 2016. That's well below the 3 percent or higher that the Trump administration is targeting.
The solid fourth quarter was fueled by strong consumer spending, which grew 4 percent — its fastest pace in three years. Gross domestic product growth would have been even faster if consumers hadn't spent so much on imports, which subtract from domestic growth.
Economists say growth is expected to slow in the current quarter but speed up later this year, boosted by tax cuts and higher government spending.
Last week, Federal Reserve Chairman Jerome Powell said the economic outlook has strengthened in recent months. He cited the stimulus offered by the big tax-cutting bill and said "ongoing job gains are boosting incomes and confidence," while global economic growth "is on a firm trajectory."
Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, was revised up to a 4.0 percent rate in the fourth quarter from the 3.8 percent pace reported last month. That was the quickest pace since the fourth quarter of 2014 and followed a 2.2 percent rate of growth in the July-September period.
Imports grew at an upwardly revised 14.1 percent pace instead of the previously reported 14.0 percent rate. That was the quickest pace since the third quarter of 2010 and overshadowed a rise in exports driven by weakness in the dollar. (CNBC)
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