2018.02.2822:44:00UTC+00U.S. Economic Growth Slowed Slightly in the 4th Quarter

U.S. economic expansion slowed slightly more than previously thought in the fourth quarter as the strongest pace of consumer spending in three years drew in imports and depleted inventories.

Gross domestic product grew at a 2.5 percent annual rate in the final three months of 2017, instead of the initially posted 2.6 percent pace, the Commerce Department said in its second GDP estimate. That was a pullback from the third quarter's 3.2 percent pace.

The downward revision to the fourth-quarter GDP growth estimate largely reflected a smaller inventory build than previously reported.

Following the release of the data US stock futures extended their gains while Treasuries rallied marginally. The yield on the US 10-year, which moves inversely to price, was down 1.6 basis points at 2.884 percent.

The median Federal Reserve policymaker is looking at growth of 2.5 percent in 2018, according to forecasts released at their monetary policy meeting in December.

The Fed has forecast three rate hikes and financial markets expect the first increase in March.

The economy expanded 2.3 percent in 2017, a pickup from the 1.5 percent marked in 2016. A measure of domestic demand expanded at its quickest since the third quarter of 2014, highlighting the economy's strength.

The U.S. economy appears to have lost further momentum at the beginning of the year, with recent data showing retail sales, home sales, durable goods orders and industrial production declining in January. In addition, the goods trade deficit widened last month as exports declined.