(Bloomberg News) The world's largest economy will strengthen through 2012 as employment gains give Americans the means to withstand rising fuel costs, according to economists surveyed by Bloomberg News.

Gross domestic product will climb at a 2.5 percent annual rate in the final three months of the year, up from 2 percent this quarter, according to the median forecast of 71 economists surveyed from March 9 to March 13. For all of 2012, the U.S. may expand 2.2 percent, accelerating from 1.7 percent last year.

More jobs, increasing share prices, improving confidence and stability in housing will bolster the expansion. At the same time, unemployment will be slow to retreat, averaging 7.3 percent in 2014, showing why Federal Reserve policy makers yesterday said interest rates will remain low for at least the next two years.

"Some of the conditions for faster growth are falling into place," said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. By the end of the year, "we'll still be a long way from what would make the Fed more comfortable. They will still be missing their full employment objective." IHS Global Insight was the second most-accurate forecaster of consumer spending over the two years through February, according to Bloomberg calculations.

Household purchases, which account for about 70 percent of the economy, will advance at a 2.4 percent pace in the final three months of the year, up from 1.9 percent this quarter, the survey showed.

Retail sales indicate the year was off to a good start. The 1.1 percent advance in February, the biggest in five months, followed a 0.6 percent increase in January that was larger than previously estimated, according to Commerce Department data yesterday. Eleven of 13 categories showed gains last month, including auto dealers and clothing stores. The results also reflected higher gasoline costs, which reached $3.81 on March 13, the highest since May.

Cars last month sold at the fastest pace in four years, led by Chrysler Group LLC and a surprise gain from General Motors Co. Light-vehicle sales accelerated 6.4 percent from January to a 15 million annual rate, the strongest since February 2008, according to Ward's Automotive Group.

Luxury retailer Nordstrom Inc., clothing chain Gap Inc. and discounter Target Corp. last month beat analysts' estimates.

Hiring gains are driving the spending. Employers boosted payrolls by 227,000 in February after a revised 284,000 gain in January, capping the best six-month streak of job growth since 2006. The unemployment rate held at a three-year low of 8.3 percent following five consecutive declines. Worker pay jumped in the last six months of 2011 by the most in almost five years.

'Solid Year'

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