US Economic Growth remains at 2.2% during fourth quarter

The US economy has witnessed a decline in the growth noticed over the last few quarters. During the fourth quarter, the economic growth remained lower than initial estimates, pointing towards the weaker business stockpiling and a bigger trade shortfall.

On Friday, the Commerce Department said that the economy measured by the gross domestic product has shown a growth at an annual rate of 2.2% in the October-December quarter. The growth is weaker than the 2.6% first estimated last month.

The report given on Friday was the second of three estimates for fourth quarter GDP, the broadest measure of the economy's total output of goods and services.

The current data has marked a decline as compared to the third quarter, which saw the strongest growth in 11 years.

However, the economists are still hoping that the period of slower growth is temporary. Many of them have even estimated that the growth will in range of 3% in 2015, leading the country to the strongest economic strength in 10 years.

Paul Ashworth, chief US economist at Capital Economics, has noted that although GDP growth has declined in the fourth quarter, yet the US has added an average of 284,000 new jobs from October through December. He added that the economy is doing just fine.

In 2014, the economy expanded 2.4%, which is slightly higher from 2.2% growth in 2013.

For the fourth quarter, consumer spending, which accounts for 70% of economic activity, was the brightest spot. It grew at an annual rate of 4.2%, slightly down from the earlier estimate of 4.3% growth but still it was the best showing since the first quarter of 2006.

Sal Guatieri, senior economist at BMO Capital Markets, said, "While the economy ended the year with less momentum than in the summer and fall, average annual growth of 2.9% in the past six quarters still denotes a meaningful upward shift from 2.1% in the first four years of the recovery".

United States