The Commerce Department said GDP grew at an annual rate of 5.7 percent during the fourth quarter, easily topping economists’ forecast of 4.5 percent.
Concerns have been mounting that potential new regulations coming out of Washington could upend a fragile economic recovery. President Barack Obama’s calls last week to restrict trading by big financial institutions helped spark the sell-off. He has provided scant details about the bank overhaul plan to help alleviate any concerns.
The president is planning to announce further details about a plan to provide small businesses with tax credits that boost hiring. A high unemployment rate — it remains at 10 percent — is one of the biggest obstacles the country faces as it tries to recover from the worst recession since the Great Depression.
The strong fourth-quarter provides the strongest sign yet the economy is recovering. The report showed consumer spending increased and there was a sharp jump in business spending on equipment and software.
The Chicago PMI jumped to 61.5 in January from 58.7 in December, beating expectations. Economists had projected the Midwest manufacturing gauge would slip to 57.2.
And consumer confidence hit a two-year high in January: Reuters and the University of Michigan said their gauge of confidence jumped to 74.4 at the end of January from 72.5 in December. That was better than the 73 economists had expected and the highest since January 2008, a month into the recession.