By Jeffry Bartash, Reporter
Published: Jan 29, 2016 – 1:30 p.m. ET

  • Growth tapers off as consumers, businesses cut back
  • Exports were a drag on growth throughout 2015.

WASHINGTON (MarketWatch) — The economy bogged down at the end of 2015, raising questions about whether U.S. growth is losing momentum.

Gross domestic product — the value of everything a nation produces — expanded at a 0.7% annual rate from October to December. That’s a big markdown from 2% growth in the fall and 3.9% last spring.

The economy expanded at a 2.4% clip last year, the same as in 2014, the Commerce Department said. The U.S. hasn’t topped 3% growth since 2005.

Softer consumer spending, falling exports and a smaller buildup in business inventories were largely the cause of the fourth-quarter slowdown, fresh government data showed. Inflation waned again.

The poor GDP report comes at a delicate time. U.S. stock markets have suffered big losses early in the new year and key segments of the economy such as manufacturing, energy and retailing are weak.

The dimmer landscape has even raised questions about whether the Federal Reserve was right to raise interest rates in December for the first time in almost 10 years — a move taken because the central bank viewed the economy as much improved.

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