Consumer spending hit three year high during 4Q

WASHINGTON (AP) — The U.S. economy grew at a 2.6 percent annual rate in the October-December quarter, slightly more than previously estimated, as consumer spending rose at the fastest pace in three years.

The Commerce Department says the fourth-quarter growth rate was a bit stronger than its 2.4 percent estimate made last month. The revision reflected stronger consumer spending, which rose at an annual rate of 3.3 percent — its best quarterly pace since 2010.

Even with the upward revision, growth in the overall economy slowed from a 4.1 percent pace in the July-September quarter. Analysts think growth has slowed even more in the current January-March period to around a 2 percent annual rate. A harsh winter has disrupted factory production and kept people away from shopping malls.

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The number of people seeking U.S. unemployment benefits fell 10,000 last week to a seasonally adjusted 311,000, the lowest since late November and a hopeful sign hiring could pick up.

The Labor Department says the four-week average of applications, a less volatile measure, fell 9,500 to 317,750. That is the fourth straight drop and the lowest level in six months. It brings applications in line with pre-recession levels.

About 3.3 million people received benefits in the week ending March 8, the latest data available. That was about 43,000 fewer than the previous week.