The U.S. economy expanded as expected in the fourth quarter, while personal income grew at a much faster pace than previously estimated, which should help support consumer spending this quarter, the government reported Thursday. Gross domestic product (GDP) increased at a 3.0 percent annual rate in the October-December period, the fastest pace since the second quarter of 2010, the Commerce Department said in its final estimate, which was unrevised from last month's estimate. However, personal income was at an annual rate of $13.162 trillion, $3.3 billion more than previously reported. Disposable income was $10.6 billion more than previously estimated, likely reflecting the strengthening labor market. Gross domestic income, which measures output from the income side, increased at a 4.4 percent annual rate-the fastest since the first quarter of 2010-from a 2.6 percent gain in the third quarter. Rising incomes should help to protect consumer spending from surging gasoline prices. Spending, which accounts for about 70 percent of U.S. economic activity, grew at a 2.1 percent annual rate in the fourth quarter. While the economy grew solidly in the final three months of 2011, momentum has slowed this quarter amid signs of cooling in manufacturing and business spending, and a pause in the housing-market recovery. GDP growth in the current quarter is expected to be around 2 percent, but growth could be threatened by persistently high gasoline prices.
