The U.S. economy grew at its fastest pace in 1-1/2 years in the fourth quarter of 2011, but a strong rebuilding of stocks by businesses and a slower pace of spending on capital goods hinted at softer growth early this year.
U.S. gross domestic product expanded at a 2.8 per cent annual rate, the Commerce Department said on Friday, a sharp acceleration from the 1.8 per cent clip of the prior three months and the quickest pace since the second quarter of 2010.
It was, however, a touch below economists expectations in a Reuters poll for a 3 per cent rate, and nearly 2 percentage points was due to the build-up in business inventories.Yes, the economy is moving forward, but the New York Times notes there is one significant problem.
The pace of growth was faster than in the third quarter, when gross domestic product expanded at an annual rate of 1.8 percent.
Even so, both figures were below the average speed of economic expansion in the United States since World War II. Above-average growth in the quarter would have helped to make up for the destruction wrought by the Great Recession.
“At this rate, we’ll never reduce unemployment,” said Justin Wolfers, an economist at the University of Pennsylvania. “The recovery has been postponed, again.”
The picture has brighter colors, yes, but the dark spots remain those millions who want to work but can't.Still, the 2.8 percent rate is likely to be seen by many as something of a relief, given that just last summer many economists were predicting the country would soon dip back into recession. Whether this modestly brisker pace of growth will continue is unclear, however.