Economy expanded at 0.4 percent in the fourth quarter

In the third quarter, gross domestic product increased by 3.1 percent.

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Despite the "fiscal cliff" overhanging the economy last year, businesses continued investing and have kept up hiring through reams of policy uncertainty. 

For all of last year, the economy grew at a 2.2 percent rate, up from 1.8 percent in 2011. 

Expectations are that the economy expanded at a 2.5 percent pace through the first three months of this year even with the implementation of the $85 billion sequester at the beginning of March. Some economists argue that the economy will take a hit on jobs and growth through the middle of the year, but could pick up pace again in the fall. 

The first quarter wraps up at the end of this month. 

Consumers have kept up spending and the housing market is picking up steam, all helping to bolster the economy.