US economic momentum at the end of 2004 was significantly stronger than previously thought, according to a Commerce Department report that revised up fourth-quarter national output to reflect a stronger trade and investment performance.

Gross domestic product, the gauge of total goods and services production within US borders, grew at a revised 3.8 per cent annual rate in the final three months of last year instead of 3.1 per cent reported a month ago. That was slightly stronger than the 3.7 per cent rate that Wall Street economists had forecast and only a small decline from the third quarter's four per cent pace.

Nearly half the revision stemmed from a stronger trade performance, reflecting more robust exports than previously thought. Statistics Canada corrected a $1.4 billion error in underestimating US exports to Canada during November, and later data also showed the US trade deficit for December narrowed more than had been anticipated.

Despite the fourth-quarter revision, there was no change in the government's calculation that GDP grew 4.4 per cent during 2004, much stronger than the three per cent increase posted in 2003 and the strongest for any year since 1999 when it expanded 4.5 per cent.

Inflation showed signs of perking up during the fourth quarter. A price index favoued by Federal Reserve chairman Alan Greenspan - personal spending minus food and energy costs - increased at a 1.6 per cent annual rate that was close to twice the 0.9 per cent gain recorded in the third quarter.