EconomicGrowth

Consumers earned a little more in January and spent most of the extra money. The modest gains should keep the economy growing slowly. But they disappointed economists, who were expecting bigger increases after two months of strong hiring. The Commerce Department said Thursday that consumer spending increased 0.2 percent in January.

U.S. factories grew in January at the fastest pace in seven months, boosted by a rise in new orders. And builders ended a poor year for construction by spending more on homes and projects for the fifth straight month. The reports bolster other data showing the U.S. economy started the year strong.

The U.S. economy grew at a 2.8 percent annual rate in the final three months of last year, the fastest growth in 2011. Americans spent more on cars and trucks, and companies restocked their shelves at the strongest pace in nearly two years. But growth in the October-December quarter -- and all of last year -- was held back by the biggest annual government spending cuts in four decades.

A new economic forecast calls for the U.S. economy to make some modest growth strides this year, but not quite enough to significantly reduce the number of jobless Americans looking for work.

The final weeks of 2011 were among the economy's strongest as Americans shopped and traveled more, ending the year with a shot of optimism for 2012. That's the bright picture the Federal Reserve sketched in a survey released Wednesday.

The U.S. economy grew a little slower over the summer than the government had earlier estimated because businesses cut back more sharply on restocking of shelves. The Commerce Department says the economy grew at an annual rate of 2 percent in the July-September quarter, lower than an initial 2.5 percent estimate made last month.