U.S. Economy Surges 2.4% in Q4 on Revised Growth Estimate

In the last quarter of 2024, the U.S. economy showed robust growth with an annual rate of 2.4%, fueled largely by increased consumer expenditure towards the end of the year, according to a report released Thursday by the government. improvement over 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 in the country without proper authorization.

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 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 decline in business stockpiles reduced the fourth-quarter GDP growth by 0.84 percentage points.

A segment of the GDP figures that gauges the fundamental robustness of the economy increased at a solid 2.9% annual pace in the final quarter, down slightly from the government’s initial projection of 3.2%, and below the 3.4% recorded in the prior three months. This section encompasses expenditures by consumers as well as investments made by businesses, though it omits fluctuating elements such as trade with foreign nations, stockpiles, and governmental outlays.

Wednesday’s report showed continued inflationary pressure By the end of 2024, the Federal Reserve’s preferred measure of inflation – the Personal Consumption Expenditures (PCE) Price Index – saw an increase at an annual rate of 2.4%. This was higher than the previous 1.5% recorded in the third quarter and exceeded the Fed’s targeted level of 2%. When looking at core PCE inflation, which excludes fluctuating food and energy costs, the figure stood at 2.6%, up from 2.2% seen in the prior three months.

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 duties on various imported goods — including a 25% tariff on imported vehicles declared on Wednesday — might boost inflation and disturb investments, thereby harming economic growth.

The data from the fourth quarter reflects the state of the U.S. economy prior to "the significant rise in policy ambiguity, notably around trade policies," as noted by Ryan Sweet, who serves as the lead U.S. economist at Oxford Economics. He further explained that "the confluence of policy uncertainties, tariff implementations, along with stricter financing circumstances, has started to exert pressure on economic expansion at the beginning of this year."

U.S. consumer confidence is dropping sharply. 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.