WASHINGTON (AP) – According to data released Thursday by the government, the U.S. economy grew at an impressive annual rate of 2.4% during the last quarter of 2024, bolstered notably by increased consumer expenditure towards the end of the year.
enhancement from its earlier projection
of fourth-quarter growth.
However, it remains uncertain whether the United States will be able to maintain that level of growth.
President Donald Trump initiates trade conflicts.
,
purges the federal workforce
and promises
mass deportations of immigrants
working unlawfully in the country.
The growth in the country’s gross domestic product, which measures the total production of goods and services, slowed down to a rate of 3.1% during the period from July to September in 2024, as reported by the Commerce Department.
Throughout the entire year of 2024, the economy — the largest globally — expanded by 2.8%, slightly less than the 2.9% growth recorded in 2023.
Personal consumption expenditures increased by 4%, up from 3.7% during the third quarter of 2023. However, corporate investments declined, primarily due to an 8.7% decrease in machinery and equipment expenditure.
A decrease in business stockpiles reduced the fourth-quarter GDP growth by 0.84 percentage points.
A specific segment of the GDP data indicating the economy’s fundamental resilience increased at a robust 2.9% annual pace in the final quarter, down slightly from the government’s initial projection of 3.2%, and below the 3.4% growth observed in the prior period. This section encompasses elements such as household consumption and business investments yet omits fluctuating components including export activities, inventory levels, and governmental expenditures.
Wednesday’s report showed
continued inflationary pressure
at the end of 2024. The Federal Reserve’s favored inflation gauge – the personal consumption expenditures, or PCE, price index – rose at an annual rate of 2.4%, up from 1.5% in the third quarter and above the Federal Reserve’s 2% target. Excluding volatile food and energy prices, so-called core PC inflation registered 2.6%, compared to 2.2% in the third quarter.
Thursday’s report was the government’s third and final look at fourth-quarter GDP.
The forecast appears more overcast. Trump’s choice to impose duties on various imported goods —
including a 25% tariff on imported vehicles
mentioned on Wednesday — might increase inflation and disturb investments, thereby harming growth.
In the final quarter, the U.S. economy was marked by “a significant rise in policy ambiguity, notably regarding trade,” before the Trump administration introduced extra tariffs, according to Ryan Sweet, who leads as the principal U.S. economist at Oxford Economics. He further noted that “the overlapping effects of unclear policies, new duties, and tighter credit markets have been exerting pressure on economic expansion so far this year.”
U.S. consumer confidence is sharply declining.
over anxiety about both tariffs and inflation, and major retailers are
lowering their expectations
For the year, stating that customers have begun to reduce their expenditures.
