The U.S. economy likely grew at its fastest pace in nearly four years in the fourth quarter as businesses made less-aggressive cutbacks on inventories, a government report is expected to show on Friday.

A Reuters survey predicted that gross domestic product, which measures total goods and services output within U.S. borders, expanded at a 4.6 percent annual rate, up from 2.2 percent in the third quarter.

Analysts reckon the change in inventories could constitute as much as three-quarters of the GDP figure and overstate the strength of the recovery from the longest and deepest downturn since the Great Depression 70 years ago.

We shouldn't dismiss it (GDP number), but the problem is the inventory cycle really doesn't last that long. It's not what we call self-sustaining growth, said Paul Ashworth, senior U.S. economist at Capital Economics in Toronto.

Getting the economy on a sustainable growth track remains one of the key challenges facing President Barack Obama, who on Wednesday outlined a raft of measures to create jobs and nurture the recovery.

The pace of inventory liquidation likely slowed in the fourth quarter, and some analysts believe inventories might even have been flat. Business inventories fell $139.2 billion in the July-September period after plunging by a record $160.2 billion in the second quarter.

NOT A FLEETING GAIN

However, not everyone agrees the economic lift from the change in the inventory cycle will be short-lived. Dean Maki, chief economist at Barclays Capital in New York, reckons the boost could act as a catalyst for sustained growth.

We believe the gain in GDP will prove more than a fleeting inventory-induced pop. Rather, we expect the normalization in inventories to spark a greater need for production and a sustained economic recovery, said Maki.

Final sales of domestic product, which exclude inventories, are expected to rise at a 1.6 percent annual pace after increasing 1.5 percent in the third quarter. Final sales are a good indicator of future GDP growth trends.

Consumer spending is expected to have risen in the last three months of 2009, but below the 2.8 percent annual pace in the prior quarter, when consumption got a boost from the government's cash for clunkers program.

Spending has been hamstrung by the worst labor market in a quarter century. Analysts noted that during periods of strong economic growth, consumer spending was rising at an average of 4 percent a year.

If you are looking for a strong and sustainable recovery, it's hard to see that happening unless consumption accelerates, said Capital Economics' Ashworth.

Residential investment was expected to make a smaller contribution to overall output in the fourth quarter.

Home building received a lift from a popular tax credit for first-time buyers, but recent data has hinted at weakness returning to the sector.

Business investment likely fell again in the fourth quarter, held back by struggling commercial real estate, which has been pressured by high vacancy rates and tight access to credit. At the same time, analysts expect gains in capital equipment and machinery, which could portend an increase in output in coming months.

(Reporting by Lucia Mutikani; Editing by Dan Grebler)

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