U.S. economic growth slows to 2.6 % in fourth quarter

The U.S. economy slowed in the final three months of 2014 as a big burst in consumer spending was offset by weakness in other areas.

The Commerce Department said on Friday the overall economy grew at a 2.6 per cent rate in the October-December period, down from sizzling gains of 4.6 per cent in the second quarter and 5 per cent in the third quarter. Consumers did their part in the fourth quarter, pushing up spending by fastest rate in nearly nine years.

Breakout year

For the year, the economy grew at a moderate rate of 2.4 per cent. But economists believe 2015 could be a breakout year for growth, with consumer spending boosted by strong employment gains and falling gas prices. Many expect growth above 3 per cent this year. That would be a significant acceleration after a prolonged period of sub-par activity. Over the past five years since the recession ended in 2009, economic growth has averaged just 2.2 per cent, far below the kinds of gains normally seen after a deep recession. The growth in 2014, as measured by the GDP, came after a 2.2 per cent gain in 2013.