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U.S. Economic Growth Moderated to 4% in Final Quarter of 2020

Consumer spending grew at a less-than-projected 2.5% pace
Business investment in equipment, housing remained firm

Photographer: Ty Wright/Bloomberg

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January 28, 2021, 1:32 PM UTCUpdated onJanuary 28, 2021, 3:33 PM UTC

The U.S. economy downshifted in the final three months of 2020 after record third-quarter growth, as the pandemic battered the labor market and limited Americans’ ability and willingness to spend.

Gross domestic product expanded at a 4% annualized rate in the fourth quarter, according to a preliminary estimate released by the Commerce Department on Thursday. The median forecast in a Bloomberg survey of economists called for 4.2%.