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US economy powers on


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The US economy grew 2.6 per cent in the fourth quarter of last year, expanding more strongly than previously thought, the US government says.

The Commerce Department revised higher its prior 2.4 per cent estimate of gross domestic product growth in the quarter, matching analyst expectations.

“The general picture of economic growth remains largely the same,” the department said in its third and final GDP estimate.

The economy grew 4.1 per cent in the third quarter.

The upward revision for the October-December quarter reflected new data showing stronger consumer spending, which accounts for about 70 per cent of activity in the world’s largest economy.

In addition, there was smaller private investment in inventories and in intellectual property products, the department said.

Personal consumption expenditures in the key year-end holiday shopping season rose 3.3 per cent, a solid gain from the 2.6 per cent growth previously estimated.

Despite the positive news, US stocks closed in the red today, with the tech-rich Nasdaq leading the losses.

The Dow Jones Industrial Average slipped a scant 4.76 points (0.03 per cent) to 16,264.23.

The S&P 500 shed 3.52 (0.19 per cent) at 1,849.04, while the tech-rich Nasdaq Composite Index was the worst performer, tumbling 22.35 (0.54 per cent) to 4,151.23.

IBM was the Dow’s biggest drag, falling 1.5 per cent, followed by Cisco, down 1.3 per cent.

Facebook reversed hefty earlier losses and ended almost 1.0 per cent higher. The social media company shed 6.9 per cent on Wednesday, as investors question its $US2 billion ($A2.17 billion) deal to buy virtual reality company Oculus.

Twitter jumped 4.3 per cent. The company on Wednesday added Facebook-style photo tagging and bumped up the number of images iPhone users can share in a single post.

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