A report from the Commerce Department showed on Thursday that the U.S. economy grew more than initially thought in the fourth quarter of 2020, primarily reflecting an upward revision to private inventory investment that was partly offset by a downward revision to nonresidential fixed investment.

According to the third estimate, the U.S. gross domestic product (GDP) grew at an annual rate of 4.3 percent in the fourth quarter, better than a 4.1 percent advance reported in the second estimate. 

Economists had expected the contraction rate to be unrevised at 4.1 percent.

In the third quarter, the economy expanded by a record 33.4 percent q-o-q.

The increase in real GDP reflected gains in exports, nonresidential fixed investment, personal consumption expenditures (PCE), residential fixed investment, and private inventory investment, which were partly offset by declines in state and local government spending as well as federal government spending (reflecting fewer fees paid to administer the Paycheck Protection Program loans). Meanwhile, imports, which are a subtraction in the calculation of GDP, rose.