The US Commerce Department revised its Q4 GDP to upward from an initial estimate of 0.7%.
Overall, the US economy is estimated to have grown at a rate of 2.4% for all of 2015.
One reason for the revised figure was greater consumer spending than officials initially thought, boosted by an improving labor market.
Analysts had expected the fourth quarter growth rate to remain unchanged from the last estimate of 1%.
Increased employment has helped to slowly boost wages and housing prices, while low oil prices have increased discretionary spending by US households.
The stronger growth rate could increase the chances of an interest rate hike when the Federal Reserve meets in April. The Fed left rates unchanged at its meeting in March, saying the slowing global economy raised risks for the US market.
US corporate profits dipped 11.5% for Q4 compared to the same October through December period in the previous year.
Companies were hurt by low oil prices, with some industrial and petroleum linked companies forced to cut their workforces or file for bankruptcy.
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