US GDP grew 2.6% in Q4

A jobs sign hangs above the entrance to the US Chamber of Commerce building in Washington, DC (GETTY IMAGES)

Economic growth in the United States grew faster than previously estimated in the fourth quarter of last year helped by stronger consumer spending, the U.S. Commerce Department said on Thursday.

Gross domestic product grew at a 2.6 percent annual rate, a significant improvement on the 2.4 percent pace reported by the Commerce Department last month.

Analysts said the revision suggests the U.S. economy had momentum towards the end of last year and could pick up strength once again after the adverse effects of this winter's extreme cold weather start to ease.

The Commerce Department said that for all of 2013, the U.S. economy grew 1.9 percent, following a 2.8 percent increase in the prior year.

This third and final estimate of fourth-quarter GDP – the value of good and services produced in the United States – was broadly in line with economists’ expectations.

The revised pace of fourth quarter growth was slower than the 4.1 percent of the previous quarter, but the strength of consumer spending, which makes up more than two thirds of the U.S. economy, suggested an underlying strength that gave analysts hope of a better year ahead.

More good news came on Thursday from the U.S. Labor Department, which said initial claims for state unemployment benefits fell 10,000 to a seasonally adjusted 311,000, the lowest level since November. Many analysts had anticipated that first-time applications for jobless benefits would rise to 325,000 in the week ended March 22.

The four-week average, considered by many a more accurate measure of the job market, fell to its lowest level since September.