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.
-
Colleges are canceling affinity graduations amid DEI attacks but students are pressing on
In the Spotlight The commencement at Harvard University was in the news, but other colleges are also taking action
-
When did computer passwords become a thing?
The Explainer People have been racking their brains for good codes for longer than you might think
-
What to know before 'buying the dip'
the explainer Purchasing a stock once it has fallen in value can pay off — or cost you big
-
Tariffs were supposed to drive inflation. Why hasn't that happened?
Talking Points Businesses' planning ahead helped. But uncertainty still looms.
-
Crypto firm Coinbase hacked, faces SEC scrutiny
Speed Read The Securities and Exchange Commission has also been investigating whether Coinbase misstated its user numbers in past disclosures
-
Starbucks baristas strike over dress code
speed read The new uniform 'puts the burden on baristas' to buy new clothes, said a Starbucks Workers United union delegate
-
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