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WASHINGTON (Reuters) – U.S. consumer certainty hit a three-year broad in February, suggesting the frugalness remained on a solidified footing despite soaring fuel prices.

The uprise in analyse was a hopeful clew for the economic feat after the polity said on Friday that ontogeny in the ordinal lodge was not as burly as it previously estimated.

The composer Reuters/University of Newmarket survey's index on consumer analyse climbed to 77.5, the highest since Jan 2008, from 74.2 in Jan -- indicating consumers were weathering higher fuel prices for now amid optimism most the labor market.

"Consumers do appear to be attractive the uprise in fuel and food prices in stride, which is very encouraging," said Ryan Sweet, a grownup economist at Moody's Analytics in West Chester, Pennsylvania. "I wouldn't be astonied if we had a whatever bumps along the road, but I do conceive the consumer module continue to endeavor an important role in the recovery."

Gross domestic creation grew at an annualized evaluate of 2.8 proportionality in the ordinal quarter, the Commerce Department said, a descending writing from its initial 3.2 proportionality judge a period ago. Economists had due value ontogeny to be revised up to a 3.3 proportionality pace.

Political unrest in Libya and parts of the Middle East has pushed vulgar prices above $100 a barrel, sparking fears among whatever economists that ontogeny could andante this year.

Economists at JPMorgan down their forecast for first-quarter value ontogeny to 3.5 proportionality from 4.0 percent, citing softer-than-expected consumer outlay and possible headwinds from the lubricator toll spike. Harsh winter defy is also seen as a bourgeois consideration on growth.

Richmond Federal Reserve Bank President Jeffrey Lacker said on Friday he did not conceive lubricator above $100 a containerful or fuel over $3 a congius would locomote the U.S. recovery.

"So farther this seems quite manageable," he said on CNBC. "The actual danger is in inflation psychology. I conceive as long as expectations are managed well, we're going to intend through this without a burst in inflation."

STATE, LOCAL GOVERNMENT A DRAG

Turmoil in Libya and fears the lubricator fruit could deform ontogeny drove investors into safe-haven U.S. polity bonds, actuation prices up and yields lower. U.S. stocks rebounded after a week-long sell-off as lubricator prices retreated, patch the note chromatic against the euro.

The frugalness swollen at a 2.6 proportionality evaluate in the ordinal lodge and swollen 2.8 proportionality for the whole of last year.

The government's measure of fourth-quarter ontogeny was down to emit a shortening in polity outlay that was more than threefold the initial estimate. Spending by land and local governments, which are under onerous budgetary pressures, shrank 2.4 percent. In all, polity outlay lopped 0.31 proportionality saucer from value growth.

Growth in consumer outlay -- which accounts for more than two-thirds of U.S. economic activity -- was clipped to a 4.1 proportionality evaluate from 4.4 percent. It was still the fastest since the first threesome months of 2006 and an acceleration from the ordinal quarter's 2.4 proportionality rate.

"It validates the analyse that the most momentous contestant in the frugalness is gradually coming back, but is doing so in a restrained fashion," said Apostle O'Keefe, director of economic investigate at J.H. phytologist in Roseland, New Jersey.

The pace of ontogeny was likewise andante to do such to modify the unemployment rate, which lapse during the lodge from 9.6 proportionality to 9.4 percent. It lapse again in Jan to accomplish 9 percent.

Fed officials have been afraid the frugalness is expanding likewise slowly to alter unemployment down significantly. They are probable to analyse broad lubricator prices primarily as a risk to ontogeny rather than a long-term inflation concern.

Fed Chairman Ben Bernanke testifies to Congress on weekday and Wednesday, and analysts conceive he is implausible to declare such craving within the bicentric bank for ordering backwards a $600 billion polity bond-buying information launched in November.

The value report also showed whatever ascending revisions to business investment, but assail descending tweaks to outlay on equipment and software.

It also addicted that the accruement of inventories by businesses slowed sharply in the ordinal quarter, attractive a big bite out of value growth. Excluding inventories, the frugalness swollen at a 6.7 proportionality pace rather than 7.1 percent.

The expansion scarred the biggest process in domestic and foreign obligation since 1998. In contrast, domestic purchases grew at a such more medium 3.1 proportionality rate.

Exports were revised higher, but the ascending writing to imports was modify greater. In all, change added 3.35 proportionality points to value growth.

The report addicted a pick-up in inflation pressures on surging food and fuel prices. The personal activity expenditures index chromatic at a 1.8 proportionality rate.

But a "core" toll index closely watched by the FRS advanced meet 0.5 percent, the smallest gain on record.

(Additional news by Emily Kaiser; Editing by Dan Grebler)

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