US Economic Growth Slows in Q4 But Matches Annual Expectations
GDP growth tapers in Q4 to 2.3%, down from previous quarter’s 3.1%
The U.S. economy expanded at an annual rate of 2.3% in the fourth quarter of 2024, a slowdown from the 3.1% growth recorded in the third quarter, as per the latest data from the U.S. Bureau of Economic Analysis.
Related News: US GDP Grows 2.3 Percent in the Fourth Quarter of 2024
The deceleration in the fourth quarter was influenced by downturns in investment and exports, which were partially offset by an uptick in consumer and government spending, the report said. The GDP growth for 2024 stood at 2.8% Year over year, consistent with the prior estimates and reflecting a balanced increase across most sectors of the economy.
Weaker Investment Figures
Consumer spending showed resilience in the fourth quarter, helping to bolster the broader economy despite weaker investment figures. Government expenditure revisions also contributed positively, adjusting the GDP growth slightly upwards by less than 0.1 percentage point from initial estimates. Conversely, both consumer spending and investment faced downward revisions which dampened the overall economic momentum. Imports, which negatively impact GDP calculations, also decreased during this period.
Inflation and Price Indices
Inflation metrics witnessed slight revisions in the fourth quarter. The price index for gross domestic purchases was adjusted to a 2.3% increase, a minor uptick from previous estimates. The Personal Consumption Expenditures (PCE) price index saw a similar rise, with core PCE—excluding volatile food and energy prices—climbing 2.7%, revised from an earlier 2.5% increase.
Annual Economic Performance
Looking at the entire year, 2024's real GDP growth was confirmed at 2.8%, unchanged from previous assessments and mirroring the increase from 2023. The economic expansion was supported by broad-based gains in consumer spending, investment, government outlays, and exports, with imports also moving higher. The annual price indices mirrored the stability in economic expansion, with the PCE price index rising 2.5% and core PCE at 2.8%.
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