Fourth quarter economic growth eased to an annualized rate of 2.3 percent, shy of an expected 2.6 percent, as the economy heads into uncertain territory.

Gross domestic product (GDP) growth slowed from an impressive 3.1 percent in the third quarter and 3 percent in the second quarter, according to data released Thursday by the Commerce Department.

Real GDP increased at 2.8 percent on the year, above the non-inflationary growth rate.

Economists said the number was an excellent one in light of a downturn that many expected in 2024, but that they anticipate more moderate growth in coming quarters.

“The economy is expected to gently ease towards its 2 percent-trend pace in the coming quarters,” EY economist Gregory Daco said in an analysis, calling the fourth quarter number “robust.”

Overall economic conditions are solid, but signals are pointing in different directions, representing uncertainties that are being compounded by political factors.

Inflation has trended upwards in recent months, and the Federal Reserve has slowed the pace of its rate cuts. Rates were held steady at a range of 4.25 to 4.5 percent this week.

Fed Chair Jerome Powell said Wednesday that the central bank is playing things by ear.

“We are not on any preset course,” he said, adding that the bank’s rate setting committee will “assess incoming data, the evolving outlook, and the balance of risks.”

Many economists have concerns about the Trump administration’s immigration policies, which could affect labor market conditions, and about the effect that Trump’s proposed tariffs could have on consumer goods prices and supply chains.

Some economists saw Trump’s tariff threat showing up in the GDP number.

“Purchases of cars and other durable goods, likely motivated by fears of Trump tariffs, accounted for 35 percent of the GDP growth in the fourth quarter,” economist Dean Baker noted on social media.

Imports surged in December and some West Coast ports handled record volumes ahead of the incoming administration.

Imported goods were $289.6 billion for December, $10.8 billion more than imports for November, according to the Census Bureau. The U.S. trade deficit clocked in at $122.1 billion in December, $18.6 billion higher than November.