U.S. economic growth slowed to a 2.6 percent pace in the fourth quarter of 2014, the Commerce Department reported Friday morning.
That number was short of Wall Street’s expectations for inflation-adjusted gross domestic product growth above 3 percent and well below the third quarter’s strong 5 percent mark.
For the year, total GDP growth was 2.4 percent, better than 2013’s 2.2 percent rate. It was the best year for economic growth since 2010 despite a sharp contraction during the first quarter.
Although the headline number on Friday’s report fell short of expectations, there were signs of underlying robustness.
Consumer spending was up by a strong 4.3 percent, aided by falling energy prices. Exports, business investment and state and local spending also contributed to the quarter’s gains.
Most of the slowdown in growth from the third quarter reflected an increase in imports, which count against total GDP.
Spending by the federal government fell sharply, following a massive boost in defense spending in the third quarter.
The U.S. is gaining economic momentum, if slowly and haltingly, as other major economies face slowdowns. Japan is fighting a recession, the Euro zone is on the verge of deflation and negative growth and China posted its slowest annual growth in a generation.
The GDP report released Friday was the first of three estimates that will be released by the Bureau of Economic Analysis, and will be revised as further information is received. The first revision is due Feb. 27.
