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U.S. economy shows some muscle, housing still weak

(Reuters) – “The U.S. economy grew a bit faster than previously estimated in the fourth quarter and new claims for jobless aid dropped to a near four-month low last week, suggesting the economy has plenty of momentum to break out of its winter chill.”

“Housing, however, will probably take a while to escape from its recent slump as contracts to buy previously owned homes fell to their lowest level in almost 2-1/2 years in February.”

“Still, economists said on balance the data on Thursday presented a better growth picture. "The economy looks in a better place than it did just 24 hours ago," said Chris Rupkey, an economist at Bank of Tokyo-Mitsubishi UFJ in New York.”

“Gross domestic product expanded at a 2.6 percent annual rate in the final three months of last year, the Commerce Department said, up from the 2.4 percent pace it reported last month.”

“Although the revised pace was still significantly slower than the 4.1 percent rate logged in the third quarter, the composition of growth suggested underlying strength.”

“Consumer spending, which accounts for more than two thirds of U.S. economic activity, was raised sharply higher and the pace of restocking by businesses was not as robust as previously estimated. Business investment in equipment was a bit stronger and the drop in government outlays was a little less pronounced.”

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Read full Reuter’s article here.

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