Robust household spending boosts US economic growth

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Robust household spending boosts US economic growth

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The US economy hummed along in the final three months of last year.

Gross domestic product was up 3.2 percent from the same period in 2012.

Consumer spending – which accounts for more than two-thirds of US economic activity – was the main growth driver, along with business investment while exports rose at their fastest pace in three years.

That economic expansion came despite October’s partial government shutdown and a much smaller contribution to growth from a restocking by businesses.

The figures were released just after the Federal Reserve felt things were going well enough that it could announce another reduction to the stimulus programme which it’s using to pump money into the economy.

The dollar and Wall Street both reacted positively.

Growth for the whole of this year is forecast at 2.9 percent, up from last year’s 1.9 percent.

Sluggish wages kept inflation pressures benign in the fourth quarter. However, a lack of wage growth could take some edge off consumer spending early in 2014.