U.S. Economy Grows 2.8%, Less Than Forecast

Restrained spending by consumers held growth in the U.S. economy to a 2.8% annual pace in the fourth quarter, slower than economists forecast while still the fastest pace in more than a year.

Gross domestic product, the value of all goods and services produced, climbed at a 2.8 percent annual pace following a 1.8 percent gain in the prior quarter, Commerce Department figures showed today in Washington.

The median forecast of 79 economists surveyed a 3 percent increase.

Growth excluding a jump in inventories was 0.8 percent.

Federal Reserve officials this week said they were concerned about the economy’s lack of vigor two years after the recession ended, prompting a pledge to keep interest rates low at least until late 2014.

The biggest gain in GDP since the second quarter of 2010 shows that the world’s largest economy has so far withstood the effects of the debt crisis in Europe.

“We’re recovering, but it’s a very long, slow, drawn-out process,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, who correctly forecast the fourth-quarter figure.

“Relatively speaking, the U.S. is one of the few areas where we would expect to see growth in 2012 better than 2011.”

From: Bloomberg