The Bureau of Economic Analysis reported that U.S. gross domestic product increased at an annual rate of 2.6% in the fourth quarter of 2014. This represents a significant deceleration from the robust 5.0% growth recorded in the third quarter.

Key Factors Contributing to Slower Growth

Several factors contributed to the slowdown, including:

• A decrease in exports: Export growth weakened, reflecting slower global demand.
• A rise in imports: Increased imports subtracted from the overall GDP figure.
• A moderation in business investment: Business investment, while still positive, grew at a slower pace compared to the previous quarter.

Positive Contributions

Despite the deceleration, some sectors continued to contribute positively to GDP growth:

• Consumer spending: Consumer spending remained a key driver of growth, supported by lower energy prices and improving labor market conditions.
• Government spending: Government spending also contributed positively to the overall GDP figure.

Looking Ahead

Economists are closely monitoring economic indicators to assess the outlook for 2015. While the fourth-quarter slowdown is a concern, many believe that the U.S. economy is still on a solid growth path, supported by strong consumer spending and an improving labor market. However, global economic conditions and potential interest rate hikes by the Federal Reserve remain key uncertainties.

The Bureau of Economic Analysis reported that real gross domestic product (GDP) increased at an annual rate of 1.1 percent in the fourth quarter of 2005, according to advance estimates. This is a notable decrease from the 3.5 percent increase recorded in the third quarter.

The deceleration in real GDP primarily reflects a downturn in personal consumption expenditures and exports, as well as a decrease in government spending. These factors were partially offset by an increase in private inventory investment and nonresidential fixed investment.

While the fourth-quarter growth rate is lower than anticipated, economists remain cautiously optimistic about the overall health of the U.S. economy. Future reports will provide further insights into the underlying trends driving economic activity.