U.S. economy slows in Q4, but spending is strong

U.S. economic growth slowed in the fourth quarter, but strong domestic demand may keep the Federal Reserve on a slow pace of interest rate cuts this year. GDP grew at a 2.3% annualized pace in the fourth quarter, below market expectations, the Commerce Department's Bureau of Economic Analysis said Thursday in its preliminary GDP estimate. Despite the slowdown, U.S. economic growth last year defied forecasts that the Federal Reserve would push the economy into recession by raising interest rates by 5.25 percentage points in 2022 and 2023 to quell inflation. Meanwhile, consumer spending, which accounts for more than two-thirds of the economy, grew at a 4.2 percent pace in the fourth quarter, suggesting domestic demand remains strong.