The United States’ GDP increased by 2.4% in the final quarter of 2024, marginally surpassing the initial estimate of 2.3%.
However, it remains uncertain if the US will be able to maintain steady economic expansion as President Donald Trump engages in trade conflicts, reduces the size of the federal workforce, and pledges large-scale deportations of immigrants who are working unlawfully within the country.
The Commerce Department stated that the GDP growth slowed down to a rate of 3.1% during October-December 2024 compared to the previous quarter.
Throughout the entire year of 2024, the economy, being the largest globally, expanded by 2.8%, which was slightly less than the 2.9% growth recorded in 2023.
Consumer expenditure increased at a rate of 4%, up from 3.7% during the third quarter of 2023. However, business investments declined, primarily due to an 8.7% decrease in equipment purchases.
A decline in business stockpiles reduced the fourth-quarter GDP growth by 0.84 percentage points.
A specific segment of the GDP data reflecting the economy’s fundamental resilience increased at a robust 2.9% annual pace in the final quarter, slightly down from the government’s initial projection of 3.2%, and below the 3.4% growth recorded in the preceding quarter.
This classification encompasses household expenditures and individual investments yet omits fluctuating elements such as export figures, stock levels, and governmental outlays.
The report released on Wednesday indicated persistent inflationary pressures towards the close of 2024. The Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditures (PCE) Price Index, saw an uptick at an annual pace of 2.4%, marking an increase from 1.5% in the previous quarter and exceeding the Federal Reserve’s targeted figure of 2%.
excluding fluctuating food and energy costs, often referred to as core PC inflation, stood at 2.6%, up from 2.2% in the previous quarter.
The government released its third and final assessment of fourth-quarter GDP on Thursday.
The forecast has become more overcast. Trump’s choice to impose tariffs on various goods, including a 25% duty on imported vehicles revealed on Wednesday, might lead to increased inflation and disturb investments, thereby impeding economic expansion.