US growth in the last quarter of 2105 was higher than first thought, according to the latest figures from the Commerce Department.

US growth in the last quarter of 2105 was higher than first thought, according to the latest figures from the Commerce Department.

The US economy grew at an annualised pace of 1% in the quarter, compared with an initial estimate of 0.7%.

Most economists had taken a more pessimistic view, expecting the figure would be revised downwards.

But businesses bought more stock than previously estimated, which meant inventory levels were $13bn higher.

The downside is that next month's growth figures may be lower than expected if businesses do get round to cutting back on inventory spending.

Chris Williamson, chief economist at research firm Markit, said: "Unfortunately, the cause of the upward revision bodes ill for the first quarter.

"The GDP number was revised higher in part due to a bigger than previously thought contribution from inventories, something which often happens due to weaker than expected demand, meaning inventories could act as a drag in the first quarter as excess stocks levels are wound down again."

Consumer spending, which accounts for more than two-thirds of US economic activity, rose at a 2% pace in the fourth quarter rather than the 2.2% rate previously estimated.