The Commerce Department will publish its first snapshot of fourth-quarter GDP at 8:30 a.m EST on Friday, two days after the Federal Reserve said the economy was expanding at a "solid pace," an upgraded assessment that keeps it on track to start raising interest rates this year.
The U.S. central bank has kept its short-term interest rate near zero since December 2008 and most economists expect a mid-year lift-off.
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Consumer spending, which accounts for more than two-thirds of U.S. economic activity, is expected to have advanced at a pace of at least 4 percent in the fourth quarter—which would be the fastest in four years and an acceleration from the third quarter's 3.2 percent pace.
Gasoline prices have plunged 43 percent since June, according to U.S. government data, leaving Americans with more money for discretionary spending. Lower gasoline prices are expected to add at least half a percentage point to GDP growth.
A strengthening labor market, despite sluggish wage growth, is also seen boosting consumer spending in the fourth quarter.
"The number of people getting a paycheck has gone up even though wages have not accelerated that much," said Guy Berger, a U.S. economist at RBS in Stamford, Connecticut. "It bolsters the Fed's confidence in how strong the bedrock of this recovery is going to be."
The economy so far appears to be largely weathering faltering growth in Asia and Europe, although recent capital expenditure data has shown significant weakness.