Port of San Diego

The Star Lima cargo ship sits docked at the Port of San Diego. (Sam Hodgson, Bloomberg)

WASHINGTON — The economy expanded at a slightly faster pace at the end of last year than previously estimated, but the rate remained tepid, the Commerce Department said Thursday.

The nation's total economic output, or gross domestic product, increased at a 2.6% annual rate in the fourth quarter of 2013. That was up from an earlier estimate of 2.4%, with the improvement coming from higher consumer spending.

Still, the upwardly revised growth rate — the government's final revision of the data — was much lower than the initial estimate of 3.2% and indicated that the recovery's momentum slowed as the year ended.

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Analysts had forecast that fourth-quarter growth would be revised up to 2.7%.

Severe winter weather hurt the economy in the first quarter of this year, with forecasts of about a 2% annual growth rate for the January-March period.

Economists expect growth to pick up this spring, and there already have been signs the economy is shaking off the winter chill.

Job creation rebounded in February to a robust 175,000. And the Labor Department said Thursday that initial claims for unemployment benefits fell to 311,000 last week, the lowest level since November.

The economy had expanded at a 4.1% rate in the third quarter, the best performance in two years. But the partial federal government shutdown in October hurt growth and caused consumer confidence to tumble.

Despite the drop in confidence, Americans surprisingly upped their spending in the fourth quarter. Consumer spending increased at a 3.3% annual rate, up sharply from the 2% rate in the third quarter and the highest level since 2010, the Commerce Department said.

Previously, the government had estimated that fourth-quarter consumer spending increased at a 2.6% annual rate. The increase was driven in part by higher spending on healthcare.

But the upwardly revised consumer figures were offset by a downgrade of business spending. Private investment increased at just a 2.5% annual rate in the fourth quarter.

That was down from a previous estimate of 4.5% and well off the 17.2% rate in the third quarter.

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