The U.S. economy grew at an upwardly revised 3.1 percent annual rate in the fourth quarter of 2010, Bloomberg reported.

The new figures, compared with the 2.8 percent estimate of gross domestic product growth issued last month by the U.S. Commerce Department, reflected a late-year leap in consumer spending.

A 2.3 percent increase in corporate profits from October to December was led by earnings at financial firms and capped the largest annual gain in six decades.

However, surging energy prices could soften the economy’s recovery in the first three months of 2011, as turmoil in the Middle East and the crisis in Japan could constrain supplies and erode consumer spending.

 “The upward revisions are encouraging, though things are shaping up to be a bit of a disappointment this quarter,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pa.

Consumer spending, which accounts for about 70 percent of the economy, rose at a 4 percent pace in the fourth quarter, the most since the same period in 2006.
“Consumer spending seems to be a little bit softer than we anticipated,” Sweet said. “We know we’ll hit speed bumps, but the recovery will gather momentum through the year and into 2012.”

America’s GDP was expected to expand at a 3 percent pace in the fourth quarter, according to the median forecast in a Bloomberg News survey of 81 economists.
The U.S. economy grew at a 2.6 percent pace in the third quarter.