U.S. economic growth in the fourth quarter of last year was revised up to 2.9 percent as consumer spending grew faster than previously reported, according to data from the Commerce Department released on Wednesday.
It was higher than the 2.5-percent increase the agency had previously reported, indicating that the U.S. economy was running at a healthy pace last year.
According to the Commerce Department, the faster GDP growth was due to the upward revision of consumer spending and private inventory investment.
Consumer spending, which accounts for more than two thirds of the economy, rose 4 percent in the fourth quarter, higher than the 3.8-percent growth reported previously, and also higher than the 2.2-percent growth in the third quarter.
Private inventory investment subtracted 0.53 percentage point from the GDP growth in the quarter, compared with the prior estimate of 0.7 percentage point.
Federal Reserve policymakers are optimistic about the economic outlook this year, saying it has strengthened in recent months.
They widely expect the economy to grow at a faster pace in 2018 and 2019, driven by fiscal stimulus and improved overseas demands.
According to their forecast, the economy will grow 2.7 percent in 2018 and 2.4 percent in 2019, higher than their previous forecast of 2.5 percent and 2.1 percent, respectively.
Based on the improved economic outlook, Fed officials are considering a faster pace of interest rate hikes. Market investors are now anticipating that the central bank might raise interest rates four times this year.
Last week, the Fed raised the benchmark interest rate and signaled two more rate hikes in 2018. It marked the bank's sixth rate hike since late 2015 and the first move under new Fed Chair Jerome Powell, who took the helm of the central bank in February.
