US Economic Growth in Q4/2024 Revised Down to 3.2%. United States (US) economic growth was revised down slightly in the fourth quarter of 2023, but was still stronger than initial projections. The growth bodes well for the near-term outlook even as activity got off to a weak start due to winter.
Data from the US Bureau of Economic Analysis on Wednesday (28/2/2024) reported that US gross domestic product (GDP) rose 3.2% on an annual basis (year-on-year/yoy) in the fourth quarter of 2024, revised down from 3.3 % previously.
Meanwhile, consumer spending rose 3%, higher than the initial estimate of 2.8%, while government spending rose to 4.2% from 3.3% previously. Throughout 2023, the US economy grew 2.5%, faster than in 2022 and far outperforming growth in the euro zone and Japan.
The 2023 economy surprised many economists who predicted that the US would slip into recession after the Federal Reserve’s aggressive interest rate hikes. Conversely, a strong labor market supports consumer spending and keeps the economy moving forward.
Although economists mostly expect growth to slow slightly this year as high interest rates dampen household demand and business investment, economists still anticipate that the US can avoid a recession.
US Economic Growth in Q4/2024 Revised Down to 3.2%. Inflation-adjusted final sales to private domestic buyers, a key gauge of demand, rose more than previously expected.
Meanwhile, the personal consumption expenditures (PCE) price index, which is the Fed’s preferred inflation metric for monitoring inflation, rose 1.8% yoy in the fourth quarter of 2024. The core PCE index excluding food and energy rose 2.1%, the Bureau of Economic Analysis report showed.
Both were slightly higher than initial estimates. Inventories decreased 0.27 percentage points of GDP, compared with a slight increase in the fourth quarter’s initial estimate. Personal consumption increased by 2 points.
Spending was revised upwards due to more spending on services. A separate report released on Wednesday showed the US goods trade deficit reached its widest in six months in January 2024, reflecting an increase in imports.
