US fourth quarter GDP unexpectedly revised higher

The second estimate of US economic growth in the fourth quarter was unexpectedly revised higher, the Commerce Department revealed on Friday.

US gross domestic product rose an annualised 1% in the fourth quarter, compared to a previous estimate of 0.7% and analysts' forecasts of 0.4%. Third quarter GDP rose 2%.

Positive contributions from personal consumption expenditures, residential fixed investment, and federal government spending were partially offset by negative contributions from exports, non-residential fixed investment, state and local government spending, and private inventory investment, the report stated.

“Financial markets were expecting a slowdown in the world’s largest economy, so much so that conversations about a recession weren’t far away," said Dennis de Jong, managing director at UFX.com.

“Yet, with unemployment remaining low and wages increasing at their fastest rate since 2009, growth is back on the agenda. Add to that cheap fuel prices and low mortgage rates, and it may only be a matter of time until disposable incomes are fully realised and growth continues to speed up.”