Economy grows at 3.2% pace in fourth quarter
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The economy grew at a 3.2% annual clip in the fourth quarter, modestly beating expectations.
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The last six months of 2013 were the best stretch of economic activity since the last quarter of 2011 and the first quarter of 2012, when a brief surge was interrupted by worries about fiscal battles in Washington and the near-collapse of southern European economies, Moody's Analytics chief economist Mark Zandi said before the report. With an improving housing market and a recent budget deal having been reached in Washington, the outlook for sustaining the momentum is much better this time, he added.
``Businesses have rock-solid balance sheets, banks are well-capitalized, and households have {reduced their debts},'' Zandi said. 'The economic headwinds from government spending cuts and tax increases were intensifying back in 2011 and 2012, while those headwinds are now fading.''
The report is the first of three estimates of fourth-quarter growth the government will publish. The data will be revised to include late-arriving information about the different indicators statisticians track to calculate the path of the overall economy.
Federal government expenditures dropped at a 12.6% annual rate, reducing overall growth by 0.93 percentage points.
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