THE U.S. economy grew by 2.6 percent in the fourth quarter of 2017, leading to 2.3-percent growth for the whole year, a pace that fell short of market expectations, according to data released by the Commerce Department Friday.

The 2.3-percent annual growth of 2017 was higher than the 1.5-percent increase in 2016, but fell below market expectation of 2.5 percent.

Consumer spending, which accounts for more than two thirds of the economy, remained the major growth engine for the economy. Consumption grew 2.7 percent and contributed 1.88 percentage points to the GDP growth in 2017.

Due to boosted strong domestic demand, U.S. imports grew 3.9 percent last year, an increase from the 1.3-percent growth in 2016.

U.S. exports also improved last year thanks to the global recovery and weak U.S. dollar. Exports grew 3.4 percent last year, compared to a decline of 0.3 percent in 2016. The trade gap was subtracted by 0.18 percentage points from the GDP growth last year.

The economic expansion which began from mid-2009 is the third-longest in American history. But it has remained at a modest pace which was slower than previous expansion cycles.

With the passage of the tax cuts bill last year, economists widely expected the economy would continue steady growth this year.

William Dudley, president of the New York Federal Reserve Bank, recently raised his forecast for U.S. growth in 2018 by 0.5 to 0.75 percentage points to a range from 2.5 percent to 2.75 percent.

“About one-third of this upward revision reflects the firmer momentum of the economy going into 2018 and about two-thirds the stimulative impact of the tax legislation,” said Dudley.

Last year’s tax bill passage lowered the corporate tax rate down to 21 percent and brought billions of tax cuts for individuals.

However, Dudley warned that the tax cuts would further worsen the fiscal strength of the United States and in turn weigh on the economic growth.

John Williams, president of the San Francisco Federal Reserve Bank, also expected the economy this year would outperform forecasts.

Williams said that stronger growth could force the Fed to raise interest rates more rapidly than anticipated. Fed officials last December forecasted three interest rates hikes this year.

According to San Francisco Fed economist Vasco Curdia, as monetary policy continues to normalize over the next two to three years, the growth is expected to gradually fall back to their trend growth estimate of about 1.7 percent.(Xinhua)