Though it failed to meet the expectations of some economists, the U.S. economy grew at a 3.2 percent annualized pace in the fourth quarter of 2010, fueled largely by a surge in consumer spending.
A cornerstone of the U.S. economy, consumer spending grew at its fastest pace in more than four years as increasing confidence in an economic recovery firmly took hold; however, the actual growth rate fell short of the 3.5 percent median forecast of 85 economists who Bloomberg News surveyed because of a slowdown in inventories. Excluding stockpiles, the economy climbed at 7.1 percent rate - the most since 1984.
Guy LeBas, the chief fixed-income strategist at Janney Montgomery Scott, accurately forecast the actual growth rate and told Bloomberg the "consumer really drove the economy in the fourth quarter." Furthermore, he affirmed: "The economy has moved beyond recovery to a stable state of growth."
The U.S. Federal Reserve could refrain from raising interest rates from their current near-record low levels after reports showed inflation rose at its slowest pace on record. After contracting at a 2.6 percent pace in 2009, the U.S. economy logged 2.9 percent growth for all of 2010 - the most in five years.