US economy grows by 2.3 percent in Q4 2024, lower than estimates

(MENAFN) According to the Commerce Department’s first advance estimate released on Thursday, the US economy grew by 2.3 percent in the fourth quarter of 2024, falling short of market expectations of a 2.7 percent increase. The slower-than-expected growth was primarily driven by strong consumer spending and government expenditures, which provided the bulk of the gains for the quarter. However, these positive contributions were partially offset by a decline in business investment, which weighed on overall growth. Additionally, imports decreased during the period, offering a modest boost to GDP calculations since imports are subtracted from the total.

This slower pace of growth marks a notable deceleration from the 3.1 percent growth recorded in the third quarter, reflecting some weakening in economic activity as the year came to a close. While the fourth quarter showed less momentum than expected, it still highlights resilience in consumer and government spending.

For the entire year, the US economy expanded by 2.8 percent, which is a slight cooling from the 2.9 percent growth recorded in 2023. Despite the minor slowdown, the full-year performance indicates steady economic momentum. The annual growth was supported by broad-based increases in consumer spending, government outlays, investments, and exports, which helped maintain overall economic strength.

In terms of inflation, the price index for gross domestic purchases rose by 2.2 percent in the fourth quarter, which was slightly higher than the 1.9 percent increase in the previous three-month period. This uptick in the price index reflects ongoing inflationary pressures within the economy despite the moderate growth.

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