WASHINGTON – The U.S. economy grew more rapidly in the fourth quarter than previously estimated as consumer spending climbed by the most in three years, showing the expansion had momentum heading into this year’s harsh winter.
Gross domestic product grew at a 2.6 percent annualized rate from October through December, more than the 2.4 percent gain reported last month, figures from the Commerce Department showed Thursday in Washington. The median forecast of 79 economists surveyed by Bloomberg called for a 2.7 percent increase.
Robust consumer spending on services, particularly health care, helped accelerate the expansion, a sign that this year’s slowdown is partly due to heavy snowfall and freezing temperatures. Retailers such as Macy’s Inc. are waiting for the weather to improve to get a clearer picture of the economy.
“The economy is shaking off the negative impacts from the weather,” said Sam Bullard, a senior economist at Wells Fargo Securities LLC in Charlotte, N.C., who accurately forecast the growth in GDP. “We’re beginning to see signs that growth is going to gain some traction and strengthen and accelerate as the year progresses.”
Forecasts in the Bloomberg survey for GDP - the value of all goods and services produced in the U.S. - ranged from gains of 2.2 percent to 3.1 percent. Thursday’s estimate is the third and final for the quarter. For all of 2013, the economy expanded 1.9 percent after a 2.8 percent increase in the prior year.
Another report on Thursday showed fewer Americans than forecast filed applications for unemployment insurance payments last week, indicating the job market was improving. The number of claims for jobless dropped to 311,000 in the week ended March 22, the fewest since late November, from 321,000 the prior period. The median forecast of economists surveyed by Bloomberg projected 323,000.
Stock-index futures were little changed after the reports. The contract on the Standard & Poor’s 500 Index maturing in June fell less than 0.1 percent to 1,841.1 at 8:50 a.m. in New York.
Consumer purchases, which account for almost 70 percent of the economy, advanced at a 3.3 percent in the fourth quarter, the most since the last three months of 2010 and surpassing the 2.6 percent gain previously reported, according to Thursday’s Commerce Department report. It added 2.2 percentage points to growth from October through December and followed a 2 percent advance in the prior three-month period.
Household outlays on services climbed at a 3.5 percent annualized rate, the biggest gain since the second quarter of 2005. The revision from the prior estimate of 2.2 percent reflected gains in health care, financial services and electricity.
Sales at U.S. retailers rose in February for the first time in three months, the Commerce Department reported earlier this month, a sign that consumer spending might be regaining traction. Purchases increased at department stores, sporting goods retailers and Internet merchants.