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U.S. economic growth revised higher to 1 pct in Q4 of 2015

Xinhua, February 27, 2016 Adjust font size:

U.S. economy in the fourth quarter of 2015 expanded faster than previously estimated, as companies' inventory investment decreased less than previously estimated.

The U.S. gross domestic product (GDP) increased at an annual rate of 1 percent during September-December 2015, higher than the advance estimate of 0.7 percent, said the Commerce Department on Friday.

In 2015, the real GDP increased 2.4 percent, the same rate as in 2014.

The upward revision was largely due to a smaller decline in inventory investment than originally estimated, which subtract 0.14 percentage point from the fourth-quarter GDP growth.

Consumer spending continued to rise steady as households remained upbeat about the labor market. Consumer spending, which accounts for about 70 percent of the U.S. economy, contributed 1.38 percentage points to the GDP growth in the quarter.

Robust growth in real disposable income, partly due to steep declines in oil prices, has boosted spending growth since mid-2014, said Jay Shambaugh, a member of the White House's Council of Economic Advisers (CEA) in a statement on Friday.

Expectations for the labor market remain upbeat despite a modest decline in optimism in the second half of 2015, which is expected to support consumer spending, he said.

According to CEA's research, the benefits of low oil prices to consumers narrowly outweighed the sharp pullback in energy sector investment.

Strong dollar continues to weigh on the economy, with net exports subtracting 0.6 percentage point from the GDP growth in the quarter. Endit