US Economy Grows Below Expectations in Q4
The US economy expanded at an annualized rate of 2.3% in the fourth quarter, falling short of economists' projections of 2.6%. This marks a slowdown from the 3.1% growth reported in Q3.
Consumer and government spending fueled economic expansion, while a decline in investment offset some gains. Over the year, the US economy grew by 2.8%, slightly below 2023's 2.9% but surpassing 2022's 2.5%.
The core Personal Consumption Expenditures index, excluding volatile food and energy, rose by 2.5% in Q4, aligning with estimates and exceeding the previous quarter's 2.2%.
Investors are closely monitoring the data to assess the Federal Reserve's potential interest rate cuts in 2025 after maintaining them on Wednesday. Fed Chair Powell emphasized the economy's strength and elevated inflation.
According to the CME FedWatch Tool, markets anticipate less than a 50% chance of rate cuts before the June meeting following the Fed's announcement.