Jan. 30 - Consumer spending and exports drove economic growth, but the lack of wage increases and the panic in emerging markets could hurt the economy. Fred Katayama reports.
Consumer spending and export growth helped boost the U.S. economy. GDP rose 3.2 percent in the fourth quarter as expected, a slight slowdown from the previous quarter. Moody's Analytics chief economist John Lonski said growth is on track. (SOUNDBITE) JOHN LONSKI, CHIEF ECONOMIST, MOODY'S ANALYTICS CAPITAL MARKETS, SAYING (ENGLISH): "The recovery is improving, it's gaining some momentum, and, after you strip away special factors, it seems tough the underlying rate of GDP growth is between 2.5 and 3 percent. I think that's good news for financial markets. And I'll add, this GDP report also showed that inflation remains well contained. " But the report raises some concerns. Lonski says the lack of growth in wages could slow consumer spending. And the continued rise in business stockpiles -- the most in 16 years - raises fears about an inventory correction if sales were to slow. This report comes as investors were hit with mixed signals in recent days - strength in consumer confidence and home prices, and surprisingly weak reports on durable goods orders and jobs - seen as a one-off due to cold weather. Lonski said the GDP data justifies the Fed's move to cut back its bond purchases despite the turmoil in the emerging markets. But he worries that a possible slowdown in spending in those markets could cut into U.S. export growth.