America's economy grew at a strengthened 2.8 percent annual pace in the final quarter of last year, but much of the acceleration was based on a restocking of business inventories – raising the prospect of some cooling early in 2012.
The fourth quarter increase in gross domestic product (GDP) represents a pickup from the 1.8 percent pace seen in the prior quarter, but it was a bit lower than what many economists expected. The number is preliminary and will be revised a bit by the Commerce Department's Bureau of Economic Analysis in a month.
GDP gains came from consumer spending as well as in the warehouse inventories, with those forces offset by declines in consumption by federal, state, and local governments.
Most forecasters believe the US has the momentum to avoid dipping back into recession, but that the recovery from recession remains weak, given the nation's high rate of unemployment.
"The economy is less healthy than the headline growth rate would suggest," Chris Williamson of the financial data firm Markit said in a written analysis of the new numbers. "Excluding inventories, the rate of expansion slowed" to just 0.8 percent.
Consumer spending is moving forward at a slightly improved clip of about 2 percent, he noted, and consumers appear more confident about buying durable goods such as cars. But they and the economy have yet to shake off the troubles that took hold during the recession.
"Consumers remain concerned about debt, job security, and the housing market, which will stifle domestic demand," Mr. Williamson said. "At the same time, companies face an uncertain climate both at home and abroad, with the Eurozone's sovereign debt crisis remaining a key cause of concern."
For the 2011 calendar year, GDP increased 1.7 percent, after rising 3 percent the year before. Many forecasters expect GDP growth to come in lower than 3 percent for 2012, but perhaps a bit higher than the 2011 pace. (All these numbers reflect estimates of inflation-adjusted output.)
In recent months, consumer confidence has improved in the US, and small businesses have grown more optimistic about hiring workers. The official unemployment rate has fallen to 8.5 percent.
But job creation has been tepid compared to some past recoveries from recession, and millions of would-be workers remain on the sidelines.
A sign of the challenge: The percentage of working-age Americans who have jobs has barely budged upward over the past year and stands near a low point for the era since women entered the work force in large numbers. Some 58.5 percent of working-age people have jobs. That ratio stood at above 64 percent before the 2001 recession.