Economic Update: Assessing Growth Trends
Recent data has revealed a deceleration in economic growth in the United States during the final quarter of the previous year, with indications of continued loss of momentum as we enter the first quarter of 2025. Contributing factors include adverse weather conditions and concerns about the potential negative impact of tariffs on consumer spending.
The U.S. gross domestic product (GDP) recorded an annual growth rate of 2.3% in the fourth quarter of 2024, following a more robust growth of 3.1% in the third quarter. This information was presented in the latest estimation released by the U.S. Department of Economic Analysis on February 27.
The growth of GDP was adjusted upward slightly by less than 0.1%, aligning it with the previously reported estimate of approximately 2.3% from the prior month. Economic analysts had anticipated that this figure would remain stable, according to consensus forecasts.
Multiple factors have influenced these economic trends, notably enhancements in government spending and exports, alongside adjustments in consumer expenditure and investment. Nevertheless, consumer spending, which constitutes over two-thirds of the economy, saw a significant increase of 4.2% in the fourth quarter, maintaining the anticipated growth trajectory.
For the year 2024, the GDP of the United States exhibited an overall growth of 2.8%, a slight decrease from the 2.9% growth rate recorded in 2023.
This uptick in economic growth signals a significant recovery exceeding an inflation-adjusted growth rate of 1.8%, as per insights from policymakers at the Federal Reserve.
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