This morning, the preliminary fourth-quarter GDP estimate came in at a solid 2.8%. This is a significant uptick from the 1.8% growth experienced in the third quarter.
Now, economists as a whole were hoping for 3.2% growth, but the Federal Reserve System was significantly less bullish with its forecast of 2.2% to 2.7% growth.
Consumer spending and improving business inventories in particular helped to buoy the economy. It is clear that the public sector was the main drag on economic growth, especially due to defense spending cuts. But, the private sector is certainly pulling its weight, with improved durable goods orders and a strengthening job market.
The economy may not be firing on all cylinders, but it is certainly revving up.