U.S. Economy Jumps Ahead of Estimates

The nation’s economy rebounded in the final three months of last year at an even more vigorous pace than previously thought, the government reported today.

The Commerce Department said the gross national product, the broadest measure of economic health, grew at a robust 4.9% rate from October through December.

The revised figure is more than 2 percentage points above the initial estimate of 2.8% made in December before the quarter had ended.

That initial projection was revised upward last month to 3.9% and was boosted again today, based on more complete data for economic activity in the period.

Best in 3 Decades

Economic growth for all of 1984 also was revised upward today to 6.9% from the earlier estimate of 6.8%. The revision left 1984 with the best economic growth in more than three decades--since an 8.3% rise in 1951.

The latest report showed that despite the rapid growth, inflation remained well under control during the year. Prices, as measured by a gauge tied to the GNP, rose 3.8% in 1984, the same increase as the previous year. The 3.8% gain was slightly higher than an original estimate last month of 3.7%, which would have been the best performance since 1967.

The new report painted a picture of an economy vigorously shaking off the effects of a pronounced drop in growth that occurred from July through September.

During that time, the inflation-adjusted GNP had risen at a rate of only 1.6% as consumer spending, a leading force behind the recovery, slowed dramatically.

Consumer Spending Up

Personal consumer spending grew at a slight 0.7% rate in the third quarter. However, in the final three months of the year that pace jumped to 3.6%.

The big rebound in activity during the final three months of 1984 has led to widespread optimism among economists that the momentum will carry over and help to assure steady growth this year as well.