US growth in Q4 2015 exceeded previous estimates
The US economy grew in the fourth quarter at a faster pace than previously estimated, supported by stronger household spending that is helping cushion the expansion from weakness overseas.
The revised 1.4pc increase in gross domestic product, the value of all goods and services produced, compares with the Commerce Department's previous estimate of 1pc, according to figures issued Friday. The economy grew 2pc in the third quarter. The report also showed that corporate profits dropped in 2015 by the most in seven years.
The earnings slump illustrates the limits of an economy struggling to gather steam at the start of this year. Some companies, encumbered by low commodities prices and sluggish foreign markets, are cutting back on investment while a firm labour market and low inflation encourage households to keep shopping.
"It's really US consumers who are powering the global economy forward at this point," said Gus Faucher, an economist at PNC Financial Services Group Inc in Pittsburgh. However, he added: "There are pressures on businesses in terms of the stronger dollar, rising labour costs and slowing productivity growth," even as a rise in energy prices will help ease that drag for oil producers.
The median forecast of 73 economists surveyed by Bloomberg had predicted Q4 growth of 1pc, with projections ranging from no change to a 1.4pc gain. This is the last of three estimates for the quarter before annual revisions in July.
Sunday Indo Business