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US economy grows at solid pace at end of 2004


US economy grows at solid pace at end of 2004


Strong corporate profits in the final three months of 2004 helped the US economy to its best year of growth since 1999.

However the latest government figures show that were some signs that inflation is picking up. For the whole year, gross domestic product – that is the value of all goods and services produced within the United States – grew by 4.4%. In the last quarter of the year it was 3.8%. That is slightly less than the 4% that Wall Street analysts had predicted. Corporate profits after taxes climbed 12.5%, that is the best increase since late 2001. Earnings were also up after having been lower in the previous quarter due to hurricanes. In the GDP report, consumer spending grew at a 4.2% rate in the final quarter of 2004, but prices were up. That has led some economists to speculate the Federal Reserve might soon accelerate its interest rate rises.
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