Economic data points to growth in fourth-quarter GDP

(Reuters) - The economy likely expanded slightly in the fourth quarter, according to data on Friday that suggested a surprise drop in GDP reported by the government last week was overstated.

The U.S. trade deficit narrowed to its lowest point in nearly three years in December on a drop in oil imports and a surge in exports.

The country's trade gap narrowed to $38.5 billion during the month, Commerce Department data showed on Friday. That was a much smaller deficit than analysts polled by Reuters had expected.

"Trade data for December paint a reassuring and encouraging picture of the U.S. economy at the end of last year," said Chris Williamson, chief economist at Markit.

A separate report from the Commerce Department showed wholesale inventories unexpectedly declined in December, which offsets some of the gains to GDP from trade.