US GDP Growth Revised Down to 0.7% as Consumer Spending Stalls
In Brief
US economic growth slowed to 0.7% in the fourth quarter, with weak consumer spending and modest inflation.
Key Facts
- US GDP growth for the fourth quarter was revised down to 0.7%.
- The Commerce Department cited a 43-day government shutdown as a factor in the slowdown.
- Consumer spending barely increased in January, according to multiple reports.
- January's core PCE inflation was reported at 3.1%.
- Wall Street is considering the data as potentially supportive of a Federal Reserve rate cut.
What Happened
The US economy expanded at a 0.7% annualized rate in the fourth quarter, a significant downgrade from earlier estimates, with consumer spending showing minimal growth and core inflation at 3.1%.
Why It Matters
The weaker-than-expected economic data may influence Federal Reserve policy discussions, as investors and analysts weigh the possibility of interest-rate cuts in response to sluggish growth and modest inflation.
What's Next
The Federal Reserve's upcoming meeting will be closely watched for any signals on rate policy. Market participants are also monitoring future economic releases for signs of continued weakness or recovery.
Sources
- Bloomberg Markets — US Consumer Spending Stalls, GDP Takes a Hit(16m ago)
- CNBC — Fourth-quarter GDP revised down to just 0.7% growth; January core inflation was 3.1%(2h ago)
- ABC News — US economy expanded at sluggish 0.7% in fourth quarter(1h ago)