US economic growth sped up to 2.8 percent in the fourth quarter, the Commerce Department said on Friday, lower than predicted as consumer spending did not rise as much as expected.

Forecasts on average were for a pickup to a 3.2 percent growth pace after the third quarter's tepid 1.8 percent expansion.

But personal consumption during the normally buoyant holiday shopping period grew only 2.0 percent from the previous quarter, far slower than the 3.6 percent pace of a year earlier. Spending on services was virtually flat during the period.

Private investment in inventories anchored the growth pickup, the Commerce Department said, but was partly offset by a 4.6 percent fall in spending by authorities at the federal and local levels.

"Muddling through is the best term that can be applied to the current economic environment, even though the risks of a downturn have been reduced," said Steven Ricchiuto of Mizuho Securities.

"By the same token, the data shows that there is no real risk of an upside surprise either."

channelnewsasia.com