The U.S. economy grew faster than initially believed in the fourth quarter due to slightly stronger consumer and business spending, the government said Wednesday in a report that could lower fears of a sharp slowdown of growth in early 2012. The Commerce Department reported that gross domestic product (GDP) expanded at a 3 percent annual rate in the October-December quarter, the fastest pace since the second quarter of 2010. The department's January estimate of fourth-quarter GDP growth was 2.8 percent. While most of the GDP growth last quarter was due to an increase in business inventories, the revisions released Wednesday showed an improved tone for the first-quarter growth outlook. Businesses were not as aggressive in their restocking efforts, and consumer spending-which accounts for about 70 percent of U.S. economic activity-rose 2.1 percent rather than the 2.0 percent initially seen. So far, various data including employment and manufacturing have shown underlying strength in the economy, reducing the need for the Federal Reserve (Fed) to ease monetary policy further by launching a third round of asset purchases, called qualitative easing. But economists are concerned about soaring gasoline prices, which have risen 13 percent since the start of the year. High gasoline costs helped to nearly extinguish growth early in 2010.
