Posted at: 02/28/2013 9:10 AM
WASHINGTON (AP) - The U.S. economy grew at a 0.1 percent annual rate from October through December, the weakest performance in nearly two years.
The Commerce Department's revision to fourth-quarter growth was only slightly better than its initial estimate that the economy shrank at a rate of 0.1 percent.
The upward revision reflected strength in exports and business investment. Analysts believe growth is rebounding in the current quarter despite higher taxes and government spending cuts set to start on Friday. A steady rebound in housing and solid business and consumer spending is expected to push growth higher in the current quarter.
Paul Ashworth, chief U.S. economist at Capital Economics, predicts growth could be as high as 2 percent in the current quarter despite higher Social Security taxes, which have reduced take-home pay for most Americans.
Meanwhile, the number of Americans seeking unemployment aid fell 22,000 last week to a seasonally adjusted 344,000, evidence that the job market may be picking up.
The Labor Department says the four-week average of applications dropped 6,750 to 355,000, the first drop in three weeks.
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