Economic Growth in 2014 Fastest Since 2010

WASHINGTON - The U.S. economy had its best year since 2010 last year, outpacing all of the other major developed countries as consumer confidence picked up, helped by sinking oil prices.

But a slowdown in the fourth quarter held back the annual growth figure, baring some of the persistent challenges -- like the soaring dollar -- to locking the world's largest economy into higher gear.

While the halving of fuel prices clearly gave American consumers the power to spend more at the end of the year, businesses slowed investment  and the government cut back on spending, especially for defense, dragging down momentum.

"There is a clear dichotomy between consumers, benefiting from cheap gas and a strong dollar, and businesses, suffering from cheap oil and the strong dollar," he said.

Dean Baker of the Center for Economic and Policy Research in Washington said there was no surprise in the ebb of GDP in recent months.

"The slowdown in the fourth quarter was predictable as third quarter growth was driven in part by a 16.0 percent jump in military spending. Military spending is highly erratic and sharp swings are usually reversed," he said.

On the other hand, he added, "Trade was a major drag on fourth-quarter growth and will continue to be if the dollar stays high." 

Wall Street stocks fell after the report, the S&P 500 losing nearly 1% and the Dow Jones Industrial Average 0.9%. 

The dollar was little-changed, rising to $1.1290 per euro, and slipping to 117.33 yen.

Copyright Agence France-Presse, 2015