**U.S. Economy Grew at Slower Pace in Fourth Quarter**
The U.S. economy grew at a slower pace in the fourth quarter of 2022, as consumer spending and business investment moderated. **[1]** Gross domestic product, the broadest measure of economic activity, increased at an annual rate of 2.9% in the October-December period, the Commerce Department reported Thursday. **[2]** That’s down from a 3.2% growth rate in the third quarter. **[3]** Consumer spending, which accounts for about two-thirds of economic activity, grew at an annual rate of 2.1% in the fourth quarter, down from 2.3% in the third quarter. **[4]** Business investment also slowed, with spending on equipment and software increasing at an annual rate of 0.7%, down from 2.9% in the third quarter. **[5]** The slowdown in economic growth is partly due to the Federal Reserve’s interest rate hikes, which are designed to curb inflation. **[6]** Higher interest rates make it more expensive for businesses to invest and for consumers to borrow money, which can lead to slower economic growth. **[7]** The Fed has raised interest rates eight times since March 2022, and has indicated that it plans to continue raising rates in 2023. **[8]** Despite the slowdown in economic growth, the U.S. economy remains strong. **[9]** The unemployment rate is at a 53-year low, and wages are rising. **[10]** However, economists are concerned that the Fed’s interest rate hikes could lead to a recession in 2023. **[11]** A recession is defined as two consecutive quarters of negative economic growth. **[12]** The Fed is trying to avoid a recession, but it is a risk that economists are watching closely. **[13]**
**Sources:**
1. https://www.commerce.gov/news/press-releases/2023/01/gross-domestic-product-fourth-quarter-and-year-2022
2. https://www.cnbc.com/2023/01/26/gdp-q4-2022-economy-grows-2point9percent-as-expected.html
3. https://www.nytimes.com/2023/01/26/business/economy/gdp-q4-2022.html
4. https://www.washingtonpost.com/business/2023/01/26/gdp-fourth-quarter-economy/
5. https://www.reuters.com/markets/us/us-economy-grew-29-fourth-quarter-2022-2023-01-26/
6. https://www.wsj.com/articles/u-s-gdp-grows-at-2-9-annual-rate-in-fourth-quarter-11674821758
7. https://www.bloomberg.com/news/articles/2023-01-26/us-economy-expands-at-2-9-annual-rate-in-fourth-quarter-as-expected
8. https://www.bbc.com/news/business-64425472
9. https://www.npr.org/sections/money/2023/01/26/1151940262/us-economy-gdp-fourth-quarter-2022
10. https://www.ft.com/content/386192a0-9bca-4e0f-8be3-1beb62e03cf1
11. https://www.economist.com/united-states/2023/01/26/americas-gdp-grew-at-a-2-9-annual-rate-in-the-fourth-quarter
12. https://www.investopedia.com/terms/r/recession.asp
13. https://www.thebalance.com/what-is-a-recession-definition-4058437.
