US confirms economy grew 3% in Q4

WASHINGTON—The US economy grew at an annual rate of 3 percent in the fourth quarter of 2011, the Commerce Department said in its final estimate Thursday.

The department’s third estimate for gross domestic product growth in the period was unrevised from its prior estimate and capped a year of steadily accelerating growth. GDP grew 1.8 percent in the third quarter.

The Commerce Department said the fourth-quarter pick-up was in part thanks to an uptick in private inventory investment and stronger consumer spending that were partially offset by a decline in federal government spending and slowing exports.

The world’s biggest economy also saw an increase in imports, a factor that subtracts from GDP growth calculations.

For all of 2011, the economy grew 1.7 percent, compared with 3 percent in 2010.

Recent data indicates GDP growth slackened in the first quarter.

Scott Hoyt at Moody’s Analytics said the seeds of the slowdown were sown in the fourth quarter as businesses rapidly built up inventories, a pace that would not be maintained.

Other factors that will drag on growth, he said, are reduced government spending and trade “as the recession in Europe undermines exports.”

Nonetheless, Hoyt said, the economy “appears increasingly solid.”

“Looking beyond temporary factors such as the warm winter, GDP appears to be expanding at an annual rate near 2.5 percent,” he said.

“While hardly a boom pace, this is strong enough to expand employment and reduce joblessness in coming months.”