Joseph Bonney, Senior Editor | Feb 29, 2012 10:03AM EST
The U.S. economy expanded at a 3 percent annual rate in the last quarter of 2011, topping the previous estimate of 2.8 percent, as consumer spending and incomes rose.
The increase compared with 1.8 percent annual growth in the third quarter, the Commerce Department said. The Commerce Department said inflation-adjusted, after-tax incomes rose 1.4 percent in the fourth quarter, nearly double the previous estimate. Increased consumer spending power bolsters estimates of continued expansion in the months ahead.
Economists surveyed by the National Association of Business Economics predict GDP growth of 2 percent in the first quarter and 2.4 percent for the full year, GDP rose 1.7 percent last year.
The Commerce Department raised its estimate of third quarter income growth to 0.7 percent from a previously estimated 1.9 percent decline. The personal savings rate was also revised upward to 4.5 percent from 3.7 percent.
Consumer spending rose 2.1 percent in the fourth quarter, as Americans purchased more autos and other long-lasting goods. Inventory restocking, meanwhile, helped support business spending.
The GDP report was one of several that have left economists more positive about this year, although concerns remain about rising gasoline prices and an unemployment rate that appears to have peaked but remains high at 8.3 percent.
The government makes three estimates of GDP for each quarter. Each revision is based on more complete economic data.
-- Contact Joseph Bonney at jbonney@joc.com. Follow him on Twitter @josephbonney.