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US GDP Revised to 2.4%, Slower Growth Expected

US GDP Revised to 2.4%, Slower Growth Expected

The U.S. economy expanded at an annualized pace of 2.4% in the fourth quarter of 2024, slightly higher than the previous estimate of 2.3%, according to the Commerce Department’s revised data released on Thursday. This followed a stronger 3.1% growth rate in Q3 2024, signaling a gradual slowdown heading into 2025.

Looking ahead, most economists predict a further deceleration in economic growth for the first quarter of 2025, with estimates ranging between 1% and 2%. Some forecasting models even suggest that the economy may have barely expanded at all in the first three months of the year.

The slowdown comes amid persistent inflation concerns, higher borrowing costs, and trade policy uncertainty, which have weighed on consumer spending and business investment. With the Federal Reserve maintaining interest rates at 4.5%, many analysts believe tighter financial conditions are contributing to a cooling economy.

Despite the weaker outlook, labor market resilience and steady consumer demand could help prevent a sharper downturn. However, economic risks remain, particularly as President Trump’s tariff policies continue to disrupt global trade and supply chains.

Investors and policymakers will be closely watching the Commerce Department’s first official estimate of Q1 2025 GDP, set for release on April 30, for further clarity on the economy’s trajectory.

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