The U.S. economy expanded at a slower pace in the fourth quarter of 2024, growing at an annualized rate of 2.3%, down from the 3.1% growth recorded in the previous quarter. This deceleration was primarily attributed to reduced inventory production, a historically volatile component of Gross Domestic Product (GDP).
Despite this slowdown, consumer spending surged by 4.2%, marking the most significant increase in nearly two years and reinforcing the economy's resilience. However, business investment declined for the first time in two years, reflecting ongoing struggles in the manufacturing sector.
For the entire year, GDP growth stood at 2.8%, maintaining a strong post-pandemic trajectory. Inflation rose to 2.3% in the fourth quarter, raising questions about potential Federal Reserve interest rate policies.
Looking ahead, economic growth could be influenced by new policy measures, including proposed tax cuts and deregulation under President Donald Trump’s administration. Additionally, concerns about potential tariffs add uncertainty to the economic outlook.
The Federal Reserve is expected to keep interest rates steady until inflation trends and the effects of new policies become clearer. While uncertainties persist, the U.S. economy remains on solid footing, with no immediate signs of recession.
