February 28, 2006 8:45 AM, EST

Fourth-Quarter 1.6% GDP Rate Is Higher Than Previously Reported

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he U.S. economy grew at an annual rate of 1.6% in the fourth quarter, higher than previously estimated but down from 4.1% in the third quarter, the Commerce Department said Tuesday.

The gross domestic product growth rate was faster than the 1.1% reported in late January, reflecting more growth in inventories and corporate investment in new equipment, Bloomberg reported.

GDP is the value of all the goods and services produced in the country.

The economy grew at a 3.5% pace for all of 2005, down from 4.2% in 2004. They were the strongest two years of growth since 1999-2000.

Consumer spending, which accounts for about two-thirds of the GDP, expanded at a 1.2% annual pace, Bloomberg said.