Separately, U.S. nonfarm productivity rose more than expected in the fourth quarter, mirroring the economy's sturdy growth pace, but weak unit labor costs pointed to subdued wage inflation. Meanwhile, the trade deficit widened more than expected in December as exports fell, which could see the advance fourth-quarter growth estimate trimmed.
Productivity rose at a 3.2 percent annual rate after increasing at a 3.6 percent pace in the third quarter, the Labor Department said. Economists polled by Reuters had forecast productivity, which measures hourly output per worker, rising at a 2.5 percent rate in the last three months of 2013.
Still, the underlying trend remained soft, with productivity increasing 1.7 percent compared to the same period in 2012. For all of 2013, productivity increased 0.6 percent. That was the smallest gain since 2011 and compared to a 1.5 percent rise in 2012.
Unit labor costs - a gauge of the labor-related cost for any given unit of output - fell at a 1.6 percent rate in the fourth quarter, showing weak wage-related inflation pressures in the economy. Unit labor costs fell at a 2.0 percent rate in the third quarter.
The Commerce Department said the trade gap increased 12 percent to $38.7 billion. November's shortfall on the trade balance was revised to $34.6 billion from the previously reported $34.3 billion. Economists polled by Reuters had forecast the trade deficit widening to $36.0 billion in December. For all of 2013, the trade deficit was $471.5 billion, the smallest since 2009.
When adjusted for inflation, the trade gap rose to $49.5 billion in December from $45.0 billion the prior month. This measure goes into the calculation of gross domestic product. The government in its advance fourth-quarter GDP estimate last week cited trade as one of the key contributors to the economy's 3.2 percent annual growth pace during the period.