The US economy grew at a modest 2.8% in the final three months of last year, the fastest growth in 2011.
Americans spent more on cars and trucks, and companies built up their stockpiles. But growth in the October-December quarter and all of 2011 was held back by the biggest annual government spending cuts in four decades.
The Commerce Department says the economy grew just 1.7% last year, roughly half of the growth in 2010 and the worst since the recession.
Consumer spending rose in the final months of the year and businesses invested more in inventories, a sign they expect more demand.
But most economists expect businesses to ease up on restocking in the first three months of the year. That should slow first-quarter growth.