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Economy slowed in final quarter of 2014

The U.S. economy grew 2.6 percent in the last three months of 2014, more slowly than in the previous two quarters of the year. That puts economic growth for the year at 2.4 percent — still the best since 2010.

The third quarter saw 5 percent growth, thanks to strong consumer spending and business investment. That was the fastest pace in more than a decade. The second quarter saw 4.6 percent growth.

Amid lower energy prices and a strengthening labor market, consumers continued to spend big in the October-to-December period of last year. In fact, consumer spending rose 4.3 percent, more than at any point since 2006.

Although consumer spending represents about 70 percent of economic growth, strong consumer expenditures weren’t enough to buoy overall growth numbers. Business investment didn’t grow as much as earlier in the year, in part because of those same lower energy prices. Exports slowed too, likely because the U.S. dollar has been strengthening against other currencies, making American goods more expensive overseas. Government spending, particularly defense expenditures, declined in the fourth quarter.

The seasonally adjusted fourth quarter GDP estimate fell below economists’ expectations of 3 percent growth, but the Commerce Department still has a chance to revise it in the coming weeks.