WASHINGTON — Real gross domestic product expanded 3.1% at an annual rate in the fourth quarter, revised up from the 2.8% growth estimate last month, as business investments and inventories were revised higher, the Commerce Department reported Friday.
Consumer spending, which accounts for about 70% of GDP, edged lower to a 4.0% increase for the quarter down from the 4.1% rise in the previous estimate.
The stronger growth for the quarter that ended Dec. 31 revised real GDP higher to 2.9% for all of 2010. GDP contracted 2.6% in 2009 and was flat in 2008. Nonresidential investments were revised higher for the fourth quarter, increasing 7.7%.
The drop in business inventory investment was not as severe as previously estimated. The change in inventories subtracted 3.42 percentage points from GDP growth, down from a subtraction of 3.70 percentage points reported last month.
Economists had expected GDP to expand 2.9% for the quarter, according to the median estimate from Thomson Reuters.
Exports were revised lower to an 8.6% increase for the quarter, smaller than the 9.6% gain reported last month.
Government spending dropped 1.7%, the largest decline since the first quarter of 2009. State and local government spending declined 2.6%, revised from the 2.4% drop reported last month.
Personal consumption expenditures, excluding food and energy spending, increased 0.4% for the quarter.
Corporate profits increased $38.2 billion in the fourth quarter, up from a $26 billion gain in the third quarter. Profits jumped 29.2% in 2010 in contrast to a 0.4% decrease in 2009.
Real GDP rose 2.6% in the third quarter.