WASHINGTON (AP) — Fueled by healthier consumer spending, the U.S. economy grew in the second half of last year at the strongest pace in a decade and more than previously estimated, new government data show.
Revised data released Wednesday also suggest a possible factor behind the pickup: Americans saved much more in 2012 than previously thought, leaving more to spend in 2013.
The economy grew at an annual rate of 4.5 percent in last year's third quarter, up from a previous estimate of 4.1 percent. Growth was 3.5 percent in the fourth quarter, up from 2.6 percent. The average 4 percent annual pace was the best six-month showing since 2003.
For 2013 as a whole, the economy expanded 2.2 percent, up from the previous estimate of 1.9 percent.
The government's newly revised figures show that growth was accelerating before harsh weather in the first quarter contributed to a sharp contraction. And growth rebounded to a robust 4 percent annual rate in the April-June quarter, the government said Wednesday. The figures indicate that the 2.1 percent contraction in the first quarter was an aberration. That number was revised higher from a previous reading of a 2.9 percent contraction.
The better growth readings also suggest that this year's healthy hiring trend will continue. Previously, the job gains in the first six months of this year were much stronger than the economic growth figures. Now they are more closely aligned.
Still, growth was weaker in 2011 and 2012 than the government had previously estimated, the revisions show. Overall, the growth trend since the Great Recession was little changed by the government's updates. The new figures show that growth has averaged 2.3 percent at an annual rate from the end of the recession in June 2009 through last year. That's a scant downgrade from the previous estimate of 2.4 percent.
The economy expanded just 2.3 percent in 2012, down from a previous estimate of 2.8 percent. And growth in 2011 was marked down to 1.6 percent from 1.8 percent.
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