Economic growth in the fourth quarter was slower than first estimated but better than expected.
The second estimate for Q4 GDP showed the economy grew at an annualized rate of 2.2%, down from the first estimate for 2.6% growth.
Friday's revision, however, was better than a revision to 2% growth that was expected by economist.
Personal consumption was revised slightly lower to 4.2% in Q4 from an initial estimate of 4.3%. This rate of spending in the quarter is still the best since the fourth quarter of 2010.
The price index for gross domestic purchases, which measures prices paid by U.S. residents, decreased 0.1% in the fourth quarter, 0.2% less of a decrease than in the advance estimate; this index increased 1.4% in Q3. Excluding food and energy prices, the price index for gross domestic purchases increased 0.7%, compared with an increase of 1.6%.
In its report, the BEA said the downward revision in Q4 GDP reflected a downward revision to private inventory investment and an upward revision to imports that were partly offset by upward revision to nonresidential fixed investment and to state and local government spending.
In a note to clients following the report, economists at BNP Paribas said, "Today’s GDP report reiterates what the FOMC already knows, the economy was on solid footing at the end of the year, while inflation and inflation expectations continue to ratchet lower than expected."
For all of 2014, the economy grew by 2.4% compared to growth of 2.2% in 2013.
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