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GDP grew 2.8 percent last quarter, but momentum still weak

The fourth quarter 2.8 percent GDP increase represents a pickup from the 1.8 percent pace seen in the prior quarter, but it was lower than economists expected. And unemployment remains high.

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Jason Weinstein, an account manager for Workforce1 Healthcare, discusses job opportunities with attendees at JobEXPO's job fair on Wednesday in New York. The number of people seeking unemployment benefits rose last week, after falling to a nearly four-year low the previous week.

Bebeto Matthews/AP

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America's economy grew at a strengthened 2.8 percent annual pace in the final quarter of last year, but much of the acceleration was based on a restocking of business inventories – raising the prospect of some cooling early in 2012.

The fourth quarter increase in gross domestic product (GDP) represents a pickup from the 1.8 percent pace seen in the prior quarter, but it was a bit lower than what many economists expected. The number is preliminary and will be revised a bit by the Commerce Department's Bureau of Economic Analysis in a month.

GDP gains came from consumer spending as well as in the warehouse inventories, with those forces offset by declines in consumption by federal, state, and local governments.

Most forecasters believe the US has the momentum to avoid dipping back into recession, but that the recovery from recession remains weak, given the nation's high rate of unemployment.

"The economy is less healthy than the headline growth rate would suggest," Chris Williamson of the financial data firm Markit said in a written analysis of the new numbers. "Excluding inventories, the rate of expansion slowed" to just 0.8 percent.

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