Revised GDP Figure Shows 3.8% Fourth-Quarter Growth

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he U.S. economy grew at an annual rate of 3.8% in the fourth quarter, up from an earlier 3.1% estimate, the Commerce Department said Friday.

The revised gross domestic product figure was close to the third-quarter 4% growth rate and some of the main drivers of the economy included consumer spending, inventory building and business investment.

Economists had predicted a 3.7% gain, Bloomberg reported.

GDP, the total value of goods and services produced, grew to $11 trillion at an annual rate for the quarter after adjusting for inflation, Bloomberg said. It was $10.8 trillion of the full year.

The revision will be updated again, Commerce said. For all of 2004, the economy grew at a 4.4% rate, the strongest since 1999, the department said.

The trade deficit, which grew in November, reduced fourth-quarter growth by 1.4% versus 1.7% previously reported, Commerce said.

Consumer spending, which accounts for about two-thirds of GDP, grew 4.2%, compared with 4.6% previously reported. Consumer spending for all of 2004 grew 3.8%, the highest since 2000, after rising 3.3% in 2003, Commerce said.

The agency that tracks trade with Canada said it had underreported U.S. exports to Canada by about $1.06 billion.

The decline in the dollar could boost exports this year because U.S. currency is cheaper in world markets, Bloomberg reported.