The US economy has grown 3.3% over the past year, easing recession fears and sending the S&P and Dow Jones soaring

The US economy grew much faster than expected in the last three months of last year, defying expectations.

America missed a recession – which many analysts had predicted was inevitable.

Gross domestic product (GDP), a measure of all goods and services produced, rose 3.3 percent annually from October through December, the Commerce Department said Thursday.

The Wall Street consensus was for a growth rate of only 2 percent in the fourth quarter.

The pace was slightly lower than the 4.9 percent in the third quarter from July to September, thanks to a strong increase in consumer spending.

Wall Street's major indexes were set for an open higher as strong economic growth raised hopes of the likelihood of a rare “soft landing” – when inflation is brought back without a recession or a big rise in unemployment.

The latest figures reflect the surprising sustainability of the US economy – and the US consumer's willingness to spend despite high interest rates and price levels.

It is the sixth consecutive quarter in which GDP has grown by 2 percent or more annually.

This is a breaking news story. Updates will follow.