US economy expands at    healthy clip but slowdown signs mount

Inflation and higher borrowing costs points to a tenuous outlook for the economy

Economists see the economy shrinking in the second and third quarters, putting 65% odds on a recession in the coming year.

The US economy expanded at a healthy pace in the fourth quarter, though signs of slowing underlying demand mounted as the steepest interest-rate hikes in decades threaten growth this year.

GDP increased at a 2.9% annualised rate in the final three months of 2022 after a 3.2% gain in the third quarter, the US Commerce Department’s initial estimate showed. Personal consumption, the biggest part of the economy, climbed at a below-forecast 2.1% pace.