Consumer spending and home construction are helping sustain modest U.S. economic growth despite problems caused by a strong dollar, low oil prices and business stockpiles.
The economy, as measured by the gross domestic product, grew at a 1.4 percent annual rate in the October-December period, the government said Friday. That was better than the 1 percent growth the government estimated a month ago.
Much of the strength came from consumer spending on services such as recreation, which helped offset a manufacturing slump.
“The consumer and housing are driving the economy despite some nasty headwinds,” said Nariman Behravesh, chief economist at IHS Global Insight. “Manufacturing for all intents and purposes is in a recession, whereas the service sectors are doing fairly well and housing has been a bright spot.”
Nearly two-thirds of the upward revision in GDP came from the boost in consumer spending, which accounts for about 70 percent of economic activity.
