The U.S. economy grew at a solid clip in the fourth quarter amid strong consumer spending, the government confirmed on Wednesday, but it appears to have lost some speed early in the new year.

Gross domestic product increased at a 3.2% annualized rate last quarter, revised slightly down from the previously reported 3.3% pace, the Commerce Department's Bureau of Economic Analysis said in its second estimate of fourth-quarter GDP growth.

Economists polled by Reuters had expected that GDP growth would be unrevised. The modest downward revision reflected a downgrade to private inventory investment.

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Inflation was fairly mild last quarter, though revised slightly up from previously reported estimates.

The economy grew at a 4.9% pace in the July-September quarter. It expanded 2.5% in 2023, an acceleration from 1.9% in 2022, and is growing above what Federal Reserve officials regard as the non-inflationary growth rate of 1.8%.

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There are, however, signs that momentum has ebbed. Retail sales, housing starts, durable goods orders and production at factories declined in January. Some of the weakness in data last month has been blamed on freezing temperatures as well as difficulties adjusting the data for seasonal fluctuations at the start of the year. Economists are not forecasting a recession.

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Financial markets expect the Fed to start cutting interest rates in June, pushed back from May. Since March 2022, the U.S. central bank has raised its policy rate by 525 basis points to the current 5.25%-5.50% range.