WASHINGTON, Feb. 28 (UPI) -- The U.S. Commerce Department revised its gross domestic product estimate for the fourth quarter on Thursday, pegging growth at a marginal 0.1 percent.
The data turns an embarrassment into very modest bragging rights. The first GDP estimate released a month ago pegged the U.S. economy as shrinking 0.1 percent in the fourth quarter of 2012, which was significantly lower than economists had expected.
"Despite the minor size of the revision, the impact on business confidence should not be underestimated. News of a contracting economy has the potential to cause companies to think twice about whether the timing is right to hire more staff or invest in new plant and machinery. The headline of the United States now avoiding contraction should therefore help encourage business expansion," said Chris Williamson, chief economist at Markit Economics.
"A similar impact on consumer confidence should likewise not be overlooked," he said in a statement.
The latest estimate could still influence markets Thursday. Economists predicted the revision to reflect fourth quarter growth of 0.5 percent.
The gap between expectations and the actual figures is significant, because it can indicate how accurately Wall Street has anticipated economic data. If investors anticipated inaccurately, stock markets have to swing quickly to catch up.
The Commerce Department said positive contributions came from personal spending, commercial fixed investment and housing. But a downturn in business investment, government spending and exports put a drag on the GDP, the department said.