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.
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.
-
Why has the Russian ruble performed so well this year?
Today's Big Question Despite economic malaise, Russia's currency is up 45% on the year
-
Israel 'pauses' Gaza military activity as aid outcry grows
Speed Read The World Health Organization said malnutrition has reached 'alarming levels' in Gaza
-
US and EU reach trade deal
Speed Read Trump's meeting with European Commission President Ursula von der Leyen resulted in a tariff agreement that will avert a transatlantic trade war
-
FCC greenlights $8B Paramount-Skydance merger
Speed Read The Federal Communications Commission will allow Paramount to merge with the Hollywood studio Skydance
-
Tesla reports plummeting profits
Speed Read The company may soon face more problems with the expiration of federal electric vehicle tax credits
-
Trump's threats to fire Jerome Powell are unsettling the markets
Talking Points Expect a 'period of volatility' if he follows through
-
Dollar faces historic slump as stocks hit new high
Speed Read While stocks have recovered post-Trump tariffs, the dollar has weakened more than 10% this year
-
Economists fear US inflation data less reliable
speed read The Labor Department is collecting less data for its consumer price index due to staffing shortages
-
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