U.S. Economy Moderates To 2.6% Growth Rate In Fourth Quarter

The U.S. economy grew by a 2.6% annual pace in the fourth quarter, slowing from a 5.0% pace in the third quarter, according to a preliminary government estimate released by the Commerce Department Friday. Economists polled by MarketWatch predicted GDP would grow by a seasonally adjusted 3.2%. Consumer spending, which is a main source of economic activity, rose 4.3% following a 3.2% rise in the third quarter. This is the biggest gain since the first quarter of 2006. But growth slowed because of slower business and government spending and higher imports. The PCE index, the Fed's preferred inflation gauge, fell at a 0.5% annual rate in the October-to-December period, compared to a 1.2% gain in the third quarter. That's the biggest drop since the first quarter of 2009.The core PCE that excludes food and energy, rose at a 1.1% clip, down from 1.4%.