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US Economic Growth Slows

Traders work on the floor of the New York Stock Exchange as it was open during Winter Storm Juno in the Manhattan borough of New York, Jan. 27, 2015.

U.S. economic growth slowed in the last three of months of 2014, as the world's largest economy expanded at a 2.6 percent annual rate.

Friday's report from the Commerce Department says that was much slower than the two previous quarters when growth went as high as a five percent rate. For all of 2014, the U.S. economy expanded 2.4 percent, which is a bit faster than the previous year.

Experts say U.S. growth slowed due to a decline in trade and business investment, and because government spending weakened, which offset strong consumer spending.

U.S. 4th Quarter GDP, 2014
U.S. 4th Quarter GDP, 2014

Some analysts say the slowdown is probably temporary because cheaper gasoline is likely to accelerate growth in 2015. If consumers spend less money on fuel, they have more to spend in other areas, which tends to boost growth.

A separate report by the University of Michigan says consumers grew more optimistic this month. Experts study consumer attitudes and expectations and wrap their results up in an index, which rose to its highest level in the past decade.

Economists watch consumer sentiment for hints about the consumer spending that drives most U.S. economic activity.