The nation's economy grew at a 3.2 percent pace in the fourth quarter, boosted by a three-year high in consumer spending, a good sign for further expansion this year.
The growth more than beat expectations, giving hope that the economic recovery might finally grow less anemic.
Consumer spending hit 3.3 percent from October to December, the highest level since the final quarter of 2010, the Commerce Department reported on Thursday. Spending is so crucial because it represents 70 percent of economic activity.
Overall, the 16-day government shutdown in October cut about 0.3 percentage points from the quarter's growth, in line with expectations.
Meanwhile, the personal saving rate fell slightly to 4.3 percent in the fourth quarter, down from 4.9 percent in the third.
The improving economy has led the Federal Reserve to cut its monthly bond-buying stimulus, including as recently as Wednesday.
In the past two months, the central bank has cut purchases by $20 billion, putting them at $65 billion a month, citing better economic conditions.
Businesses accumulated $127.2 billion worth of inventories in the fourth quarter of last year, the most since early 1998.