By Jeffry Bartash at The Wall Street Journal's Market Watch
WASHINGTON (MarketWatch) - The U.S. economy grew 2.8% in the final three months of 2011, propelled by increases in consumer spending and business inventories, according to a preliminary government estimate. The increase in gross domestic product was the fastest in a year and a half. Economists surveyed by MarketWatch projected GDP would rise 3.0%. Inventory spending surged to an estimated $56 billion after a $2 billion decline in the third quarter, the Commerce Department reported. Consumer spending rose 2.0%, compared to 1.7% in the third quarter. Government spending fell at all levels. Exports climbed 4.7% while imports rose 4.4%. Real final sales in the U.S., which exclude imports and inventories, rose just 0.9% after a 2.7% increase in the third quarter. Inflation as measured by the consumer PCE index rose 0.7%, but that was down sharply from a 2.3% increase in the third quarter. Excluding food and energy, the index rose 1.1% compared to 2.1% in the third quarter. Real disposable income edged up 0.8% in quarter and the personal savings rate fell to 3.7% from 3.9%.