(CN) – The U.S. economy grew at a faster pace that originally estimated in the fourth quarter of 2017, thanks to a revised analysis of consumer spending and a smaller drag from inventories, the Commerce Department said Wednesday.
According to the government, the nation’s gross domestic product, the value of all goods and services produced in the United States, grew at a solid 2.9 percent in the final three months of last year, capping three straight quarter of solid growth.
The Commerce Department had previously said the economy grew at a 2.5 percent annual rate during the quarter.
The Trump administration is hoping the economy will accelerate further this year, aided by sizable tax cuts and increased government spending. Wednesday’s reports suggests the White House may be rewarded for its optimism when the numbers for the first quarter of 2018 are reported.
The gain in fourth- quarter profits from a year earlier, coupled with lower corporate taxes, augurs well for business investment and employment. Consumer spending, which accounts for about 70 percent of the economy, is also expected to remain strong in coming months thanks to bigger after-tax paychecks and the robust labor market.
Overall, consumer spending grew at the fastest pace in three years during the fourth quarter of 2017.