U.S. Economic Growth Slows Amid Cold and Tariffs

U.S. economic growth decelerated to a 2.3% rate in the last quarter of 2024, with cold weather and tariffs impacting the economy. While consumer spending remained strong, concerns over tariffs and government spending cuts persist. The Federal Reserve paused interest cuts amid inflationary pressures.

The U.S. economy experienced slower growth in the fourth quarter of 2024, registering a 2.3% increase in GDP, according to the Commerce Department's Bureau of Economic Analysis. This represents a slowdown from the third quarter's 3.1% growth rate.

Economists had anticipated no change in GDP projections, but slight revisions showed an upgrade in government spending and exports, which were countered by reduced consumer spending and investment. Consumer spending, a significant economic driver, maintained a 4.2% growth rate.

Contributors to the slowdown included harsh winter conditions that dampened retail and housing sectors, alongside the impact of tariffs imposed by the Trump administration, which have sparked inflation concerns. The Federal Reserve paused its interest rate cuts in January, citing fears of rising inflation.