GDP Growth Slowing: Is the Economy Losing Steam?

The U.S. economy grew at an annualized rate of 2.3% in the fourth quarter of 2024, down from 3.1% in the previous quarter. That might not seem dramatic, but it’s a clear sign that momentum is fading.

Consumer spending is softening, business investment is slowing, and with new tariffs in play, costs could rise even further. Economic slowdowns don’t happen overnight—they creep in gradually. First, GDP growth slows. Then, hiring freezes start. Before long, businesses cut costs, layoffs rise, and recession fears become reality.

Policymakers may argue that the economy is still in decent shape, but the numbers don’t lie. When growth slows, it usually keeps slowing. The question now is whether this is a temporary dip or the start of a long-term economic downturn. If recent history is any guide, the time to prepare for a slowdown isn’t when a recession is declared—it’s right now.