The U.S. economy grew at a 2.8 percent annual rate in the last three months, largely thanks to a mix of consumer spending, corporate investment and homebuilding. It was an increase from last quarter's meager 1.8 percent growth but below analyst expectations of 3 percent growth, the rate that typically prompts hiring by employers. Here's what econ reporters are teasing out of the Commerce Department report:
Consumer spending Consumer spending rose to a 2 percent annual rate up from a 1.7 percent rate in the previous quarter. Tracking the performance of the best performing businesses, The New York Times reports that "individual companies like General Electric and Lockheed Martin closed the year with record order backlogs, a sign that, at least for some businesses, demand is so strong that they cannot produce quickly enough. The backlogs portend solid manufacturing growth going forward, and suggest to some economists that the United States could weather the euro crisis relatively unscathed after all." Harley Davidson, the nation's largest motorcycle maker, said sales increased 12 percent. “We feel great about where we see retail sales in the U.S., but certainly remain cautious as we look forward, given the tentative nature of the overall economy and consumer confidence,” John Olin, chief financial officer of Harley- Davidson Inc., said, as quoted in Bloomberg. The AP adds that "People are buying more cars, and consumer confidence is rising. Even the depressed housing market has shown enough improvement to make some economists predict a turnaround has begun."