U.S. economy grew in Q4, but showed signs of slowdown, report says


The U.S. economy grew at a better-than-expected 2.9 percent annual rate between October and December of last year, a slight slowdown from the previous quarter, the U.S. Commerce Department said Thursday.
Per CNBC, economists had been expecting a Q4 reading of 2.8 percent, down from Q3's 3.2 percent.
Consumer spending, which comprises over half of GDP, increased just 2.1 percent for the period — a slight decline from last quarter "but still positive," CNBC writes. Overall, Thursday's is a "mixed report," Bloomberg posits, but one that suggests the Federal Reserve might still pull off a so-called "soft landing," in which the central bank cools the economy without tipping it into a recession.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
"The mix of growth was discouraging, and the monthly data suggest the economy lost momentum as the fourth quarter went on," said Capital Economics' Andrew Hunter, per CNBC. "We still expect the lagged impact of the surge in interest rates to push the economy into a mild recession in the first half of this year."
Comerica Bank's Bill Adams seems to agree: "Headwinds from the big jump in interest rates, consumers cutting back on discretionary spending, and weak economies overseas were big problems for the U.S. in late 2022," he told The Wall Street Journal. "I expect real GDP growth will likely turn negative in the first half of this year."
To that end, all eyes will likely be on consumers, who, as evident in Thursday's report, may be "starting to stumble," the Journal writes. But with inflation edging lower and wage growth staying strong, perhaps spending will continue unperturbed.
Otherwise, the Federal Reserve will have its first meeting of the year next week, during which officials will discuss yet another interest rate hike to further cool rising prices.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Brigid Kennedy worked at The Week from 2021 to 2023 as a staff writer, junior editor and then story editor, with an interest in U.S. politics, the economy and the music industry.
-
The Week Unwrapped: Will robots benefit from a sense of touch
Podcast Plus, has Donald Trump given centrism a new lease of life? And was it wrong to release the deadly film Rust?
-
The week's best photos
In Pictures A dancing couple, a new pope, and more
-
How to create your perfect bedscape
The Week Recommends Nighttime is the right time to get excited about going to bed
-
Warren Buffet announces surprise retirement
speed read At the annual meeting of Berkshire Hathaway, the billionaire investor named Vice Chairman Greg Abel his replacement
-
Trump calls Amazon's Bezos over tariff display
Speed Read The president was not happy with reports that Amazon would list the added cost from tariffs alongside product prices
-
How will Wall Street react to the Trump-Powell showdown?
Today's Big Question 'Market turmoil' seems likely
-
Markets notch worst quarter in years as new tariffs loom
Speed Read The S&P 500 is on track for its worst month since 2022 as investors brace for Trump's tariffs
-
Tesla Cybertrucks recalled over dislodging panels
Speed Read Almost every Cybertruck in the US has been recalled over a stainless steel panel that could fall off
-
How will the Fed manage Trump's economy?
Today's Big Question Jerome Powell is 'in a bind'
-
Crafting emporium Joann is going out of business
Speed Read The 82-year-old fabric and crafts store will be closing all 800 of its stores
-
Why is the threat of stagflation rising?
Talking Points Inflation is sticky. Trump's tariffs won't help.