US GDP misses forecasts after growth of 2.8% in Q4

The US economy expanded by less than forecast at 2.8% in the fourth quarter of 2011, official figures have revealed.

The data, released from the US Department of Commerce's Bureau of Economic Analysis, was below forecasts.

Analysts had expected the first reading of US GDP to come in at 3%.

The Bureau said the increase in real GDP in Q4 reflected positive contributions from private inventory investment, personal consumption, and exports.

The figure follows a 1.8% expansion in Q3, revised down from an initial reading of 2%.

The US economy is powering ahead of Europe having entered and exited recession well ahead of other nations at the end of the last decade.

An accommodative Federal Reserve has moved to boost growth via quantitative easing, while the weaker dollar - one of the main victims of QE - has allowed the country's exporters to flourish.

The country still faces huge challenges however, not to mention its sprawling budget deficit which is around $1trn.

Today, the US revealed plans to cut the defence budget by $485bn as the country takes steps to address the shortfall.