U.S. economy grew 3% in closing quarter of 2011
The U.S. economy grew at a solid pace in the final three months of 2011, but that growth likely slowed in the opening quarter of this year as businesses cut back on restocking their shelves. The economy grew at an annual rate of 3% in the October-December quarter, the fastest pace since spring 2010, the Commerce Department says in a report released this morning. The government's third and final look at fourth-quarter growth was unchanged from the previous estimate. Economists estimate growth slowed to around 1.5% in the current quarter. For 2012, economists at JPMorgan believe the economy will grow 2.2%—slightly better than last year's 1.7% expansion. Growth at that level would nonetheless be far below what economists believe is needed to make sustained gains in employment. For the fourth quarter, consumer spending—which accounts for 70% of economic activity—expanded at an annual rate of 2.1%, led by strong gains in car sales. Business investment rose at a 5.2% annual rate, pushed higher by companies rushing to make equipment purchases before special investment tax breaks expired at the end of the year. That rate was nearly double the estimate the government made a month ago. But those numbers were offset by a reduction in the estimate of export growth. U.S. exports grew at an annual rate of 2.7% in the fourth quarter, short of an estimate of 4.3% a month ago.
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