Economy Growing at Fastest Pace Since 2003

The US economy grew for a second straight quarter from October through December, posting a better-than-expected 5.7% annual rate—the fastest quarterly pace since 2003. The Commerce Department report is the strongest evidence to date that the worst recession since the 1930s ended last year, though an academic panel that dates recessions has yet to officially declare it over.

The two straight quarters of growth followed a record four quarters of decline. Still, the expansion in the fourth quarter was fueled by companies refilling depleted stockpiles, a trend that will eventually fade. Growth exceeded expectations mainly because business spending on equipment and software jumped 13.3%, much more than forecast. The report provided an upbeat end to an otherwise dismal year: The country's economy declined 2.4% in 2009, the largest drop since 1946. (More GDP stories.)