The data agency said domestic demand rose 0.3 percent in the quarter as both households and the government increased spending. Demand was held in check by spending on fixed capital items, which declined quarter to quarter.
Household spending was up 0.8 percent with a push on expenditures for services and non-durable goods.
Business spending on fixed capital items dropped 0.5 percent after rising 0.3 percent in the third quarter. On balance, spending was lower on residential and commercial buildings, but higher for machinery and equipment.
Business inventories rose with non-farm inventories setting the pace, contributing most of the gains.
Exports rose twice as fast as imports, rising 0.4 percent, while imports rose 0.2 percent.
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