The Federal Reserve should be pleased with the headline figures from Thursday’s fourth-quarter GDP report, which showed the US economy grew a solid 2.9% while its Prime Price Index slowed to 3.2%. But dig deeper and the economy appears to be losing momentum.
Perhaps the best news in the report is that consumer spending continued to rise at a steady 2.1% and contributed roughly half of GDP growth. It appears that rising interest rates have yet to cause consumers to back off, although the December retail sales report showed a sharp drop in spending and could portend a slowdown.
