WASHINGTON, Feb. 28 (Xinhua) -- The U.S. Commerce Department Friday cut its estimate for the fourth quarter growth to an annual rate of 2.4 percent, lower than the 3.2 percent rate initially reported.
The downward revision mainly reflected changes in consumer spending and exports, which proved less robust than previously thought.
The growth rate of the real gross domestic product (GDP) in October-December period was also below the 4.1 percent pace registered in the third quarter.
The deceleration reflected a decrease in private inventory investment, a larger cut in federal government spending, and downturns in residential fixed investment, the report noted.
Growth for real personal consumption expenditure, which accounts for more than two-thirds of the U.S. economy, was revised down to 2.6 percent from an initial reading of 3.3 percent. It still marked the strongest performance since the first quarter of 2012.
Exports were also weaker than had been expected. It expanded at an annual rate of 9.4 percent for the fourth quarter, compared with an increase of 11.4 percent initial estimate.
Contribution to growth from the change in private inventories, which was estimated at 0.42 percentage point a month ago, was revised down to 0.14 percentage point.
Business investment was a bright spot, as nonresidential fixed investment rose 7.3 percent, up from the preliminary estimate of 3. 8 percent.
Friday's release is the second estimate of the fourth-quarter growth. The Commerce Department usually makes three estimates of the quarterly growth rate as source data collected becomes more complete. The final estimate will be released next month.
Economists worried that the softness would last till the first quarter this year. U.S. Federal Reserve Chair Janet Yellen said Thursday that some recent economic indicators have pointed to weaker consumer spending than had been expected, but the central bank needs more time to judge how much the weather has played a role.
In her semi-annual testimony on the economic outlook and monetary policy, Yellen said the Fed will monitor coming data to see whether the weakness reflects only a temporary slip caused by unusually cold weather.
"Since my appearance before the House committee, a number of data releases have pointed to softer spending than many analysts had expected," Yellen told lawmakers in the Senate Banking Committee.
"Part of that softness may reflect adverse weather conditions, but at this point it is difficult to discern how much," she added.
"In the weeks and months ahead, my colleagues and I will be attentive to signals that indicate whether the recovery is progressing in line with our earlier expectations," she said, maintaining that it would take a "significant change in the outlook" for the central bank to pause its gradual reduction of asset purchases, which now totals 65 billion dollars a month.
The Fed will hold its next meeting on March 18-19.