The U.S. economy expanded less than forecast in the fourth quarter as consumers curbed spending and government agencies cut back, validating the Federal Reserve’s decision to keep interest rates low for a longer period.
Gross domestic product, the value of all goods and services produced, climbed at a 2.8 percent annual following a 1.8 percent gain in the prior quarter, Commerce Department figures showed today in Washington. The median forecast of 79 economists surveyed by Bloomberg News called for a 3 percent increase. Excluding a jump in inventories, growth was 0.8 percent.
Home building also picked up, adding to signs the industry is stabilizing. Construction of residential real estate climbed at an 11 percent annual rate, the best performance since the second quarter of 2010. For all of 2011, the industry shrank 1.4 percent, the smallest decline since 2005, the last year homebuilding grew.