GDP Revised Upward

GDP Revised Upward

The U.S. economy grew faster than previously estimated in the last quarter of 2010, but many economists say rising oil prices will slow growth this year.

The Commerce Department said gross domestic product grew at an annual rate of 3.1 percent in the October-December quarter. Last month's estimate was 2.8 percent.

The expansion was driven by 4 percent growth in consumer spending, the strongest gain in four years and by increased business spending.

Economists say consumer spending, which accounts for 70 percent of economic activity and is a top driver of containerized imports and intermodal freight volume, may be hurt by rising gasoline prices. The Japanese disaster, too, will have at least a short-lived effect on companies, especially in the automotive and electronics industries, that rely on Japan-made parts in their supply chains.

Housing is another question mark. Residential construction in the fourth quarter grew at an annual rate of 3.3 percent after plunging at a 27.3 percent rate in the July-September quarter, but recent reports have indicated slowing of homebuilding amid tight credit and high unemployment.

Economic growth also is being affected by cutbacks by state and local governments. Commerce Department statistics showed government spending was shrinking at a rate of 1.7 percent in the final three months of last year.

-- Contact Joseph Bonney at jbonney@joc.com.