The US economy showed signs of strain in the fourth quarter, raising questions about growth momentum heading into 2025. Gross domestic product expanded at a slower pace than expected, with consumer spending and business investment both weakening.

This slowdown comes as Federal Reserve policymakers weigh the impact of interest rate cuts on economic activity. The Labor Department reported mixed signals, with job growth remaining resilient but wage gains moderating. These data points suggest the economy may be reaching a turning point after years of robust expansion.

Markets reacted cautiously to the GDP figures, with Treasury yields falling and stock futures edging lower. Investors are now parsing whether this represents a temporary soft patch or the beginning of a more pronounced slowdown. The Federal Reserve will likely factor these developments into its policy decisions as it navigates between supporting growth and controlling inflation.