U.S. economic growth cooled in the fourth quarter as previously estimated, with businesses throttling back on inventory and equipment investment but robust consumer spending limiting the slowdown in the pace of activity.
Gross domestic product expanded at a 2.2 percent annual rate, unrevised from last month's forecast, the Commerce Department said on Friday in its third estimate. The economy grew at a 5 percent rate in the third quarter.
The government also reported that after-tax corporate profits fell at a 1.6 percent rate in the fourth quarter, as a strong dollar dented the earnings of multinational corporations.
After-tax profits increased at a 4.7 percent rate in the July-September period. For all of 2014, profits dropped 8.3 percent, the largest annual drop since 2008.
Slower economic growth together with benign inflation could prompt the Federal Reserve to delay raising interest rates until later this year. The U.S. central bank has kept its short-term lending rate near zero since December 2008.
Fed officials last week lowered their individual growth estimates for this year through 2017.
The moderate pace of expansion appears to have persisted through the first quarter.
The sturdy dollar, lingering weakness in Europe and Asia, harsh winter weather in the United States and a now-settled labor dispute at the busy U.S. West Coast ports dampened activity in first two months of the year.
With temperatures rising, there are signs of some pick-up in activity.
But the dollar, which gained 7.8 percent against the currencies of the main U.S. trading partners between June and December, will likely provide a challenge for domestic manufacturers.
First-quarter growth estimates range between a 0.9 percent and 1.4 percent rate.