On the other side of the ledger, a decline in residential investment and a sharp decrease in federal government spending subtracted from growth in the fourth quarter of the year. Going forward, I expect that there will be less fiscal drag in 2014 than we saw in 2013 and that housing will continue its recovery.
Personal consumption, which accounts for more than two-thirds of GDP, advanced at an annual rate of 3.3 percent in the fourth quarter, the highest personal consumption growth rate since fourth quarter 2010. Rising house prices and stock prices have helped improve consumer balance sheets, and steady job growth has added to wage and salary growth, all of which have supported spending.