US economy grows at faster 2.6 percent pace in Q4

The economy expanded at a 2.6 percent annual rate in the final three months of last year, slightly faster than last estimated. 

Growth was stronger than the 2.4 percent pace reported last month, boosted by consumer spending that hit a three-year high in the October-December period, the Commerce Department reported on Thursday. 

{mosads}Spending, which represents about 70 percent of economic activity, came in at 3.3 percent, the best showing since 2010. That was an improvement over the 2 percent level in the third quarter. 

Still, growth in the final quarter of the year tapered from the 4.1 percent pace in the July-September period. Many economists said the government shutdown in October would weigh on growth during the final three months of the year.

Severe winter weather is expected to hold back growth in the first three months of this year, with expectations hovering around a 2 percent annual pace. 

But analysts are more upbeat about the rest of the year, especially as temperatures rise, with gross domestic product expected to accelerate to more than 3 percent by the middle of next year, the National Association of Business Economics (NABE) said in a survey this week. 

Annual economic growth has not exceeded 3 percent since 2005.

NABE said spending will increase 2.6 percent in 2014 and is projected to rise 2.9 percent in 2015.