U.S. economic growth in fourth quarter unexpectedly revised up to 1%

Reporting from Washington â€”  The U.S. economy performed better at the end of 2015 than initially estimated, though growth still slowed sharply from earlier in the year, the Commerce Department said Friday.

The nation’s total economic output, also known as gross domestic product, expanded at a 1% annual rate from October through December. That was an improvement from the initial estimate last month of 0.7% growth.

The upward revision was because of more complete data, including figures showing a much smaller decline in the growth of business inventories than in the earlier estimate, the Commerce Department said.

Friday’s report was the second of three estimates.

Analysts had expected fourth-quarter economic growth to be revised down to 0.4% Friday as the U.S. dealt with a slowing global economy and the effects of the strong dollar, which made exports more expensive abroad.

Still, fourth-quarter growth was a big drop-off from the previous quarter, when the economy expanded at a 2% rate.

The decline came as consumers slowed their spending growth and businesses reduced their pace of investments in inventories.

Consumer spending in the fourth quarter grew 2%, compared with 3% in the previous quarter.

Business spending on inventories declined by $3.8 billion to $81.7 billion. But that was an improvement over the initial estimate of a $28-billion decline in private inventory spending from the previous quarter.

Economists expect overall growth to pick up in the first quarter, to about a 2% annual rate.

[email protected]

Follow @JimPuzzanghera on Twitter