Rising inventories and consumer spending caused U.S. gross domestic product to expand at a 2.8 percent annual rate in the fourth quarter, the fastest growth in a year and a half.
Inventories added 1.94 percentage points to GDP growth in the quarter as companies rebuilt stockpiles to respond to rising demand. Excluding inventories, the economy grew at an 0.8 percent rate, down from 3.2 percent in the third quarter, said the Commerce Department.
Consumer spending, which accounts for two-thirds of economic activity, rose 2 percent in the fourth quarter, compared with 1.7 percent in the third quarter and 0.7 percent in the second.
The savings rate grew at a 3.7 percent rate, compared with 3.9 percent in the third quarter. Amid sluggish income growth and an 8.5 percent unemployment rate, much of the increased spending has been financed through savings or credit, suggesting slower growth in the months ahead.
Business spending on capital goods rose at the slowest rate since 2009. Nonresidential fixed investment grew 1.7 percent, compared with 15.7 percent in the third quarter and 10.3 percent in the second.
The GDP report comes as surface transportation volume is rebounding, aided by continued strength in the manufacturing sector. For-hire truck tonnage closed the year with double-digit growth that pushed 2011’s volume to a 5.9 percent increase, the American Trucking Associations said.
Traffic on major U.S. railroads rose during the first three weeks of this year, with intermodal units up 0.4 percent and carloads rising 1.1 percent year-over-year, according to the Association of American Railroads.