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US economy scores robust growth in fourth quarter

WASHINGTON -- The U.S. economy grew at a robust annual rate of 3.2 percent in the fourth quarter despite the partial government shutdown in October, according to Commerce Department data released Thursday.

Growth in gross domestic product was led by pick-up in exports and a strong acceleration in consumer spending, the main driver of the U.S. economy.

Most analysts had penciled in 3.0 percent GDP growth in the October-December quarter, following the 4.1 percent pace in the third quarter.

Consumer spending rose a hearty 3.3 percent, the sharpest quarterly growth in three years, following a 2-percent rise in the prior quarter, the department said in its first estimate of GDP for the period.

Real exports of goods and services jumped 11.4 percent, well above the 3.9-percent increase in the third quarter, as exports grew faster and imports slowed.

The slowdown from the third quarter mainly reflected lower inventory investment, as well as a 12.6-percent decrease in federal government spending, a downturn in housing investment and weaker business investment.

“This GDP release cements the conclusion that U.S. economic growth has finally accelerated from fair to good, and provides evidence that this acceleration will continue into 2014,” said Doug Handler of IHS Global Insight.

Handler noted that the contribution of federal spending was hit by the October 1-16 government shutdown and ongoing cutbacks launched at the beginning of the year.

“Most of these effects will not carry into this year,” he said.

U.S. President Barack Obama signed a US$1.1 trillion dollar spending bill on January 17, the product of a rare budget truce in Congress, that effectively ends the threat of a repeat government shutdown.

The Commerce Department said that the full effects of the shutdown “could not be quantified.”

However, it estimated that the reduction in hours worked by federal employees, hundreds of thousands of whom were furloughed during the shutdown, trimmed 0.3 percentage points off GDP growth.

Obama's top economic adviser, Jason Furman, highlighted that the private sector capped off its fastest year of growth since 2003.

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