Real gross domestic product (GDP) in the U.S. grew at an annual rate of 2.3 percent in the fourth quarter of 2024, according to the second estimate from the Bureau of Economic Analysis. This marks a slowdown from the 3.1 percent growth recorded in the third quarter. The increase in GDP was primarily driven by consumer and government spending, partially offset by a decline in investment. Imports, which reduce GDP in calculations, fell during the period.
The revision from the initial estimate was minimal, with real GDP adjusted upward by less than 0.1 percentage point. Upward revisions in government spending and exports were offset by downward adjustments in consumer spending and investment. Compared to the third quarter, the slower GDP growth in the fourth quarter reflected downturns in investment and exports, partially offset by stronger consumer spending. Imports also declined.
Inflationary pressures remained moderate, with the price index for gross domestic purchases rising 2.3 percent, revised up by 0.1 percentage point. The personal consumption expenditures (PCE) price index increased 2.4 percent, while the core PCE index, excluding food and energy, rose 2.7 percent, revised up by 0.2 percentage point.
For the full year 2024, real GDP grew by 2.8 percent, unchanged from prior estimates. Growth was supported by increases in consumer spending, investment, government spending, and exports, though imports also rose. The price index for gross domestic purchases increased 2.4 percent, revised up slightly, while the PCE price index and core PCE index remained steady at 2.5 percent and 2.8 percent, respectively.
Revisions to GDP components were driven by updated data. Government spending saw upward revisions due to federal expenditures, particularly in defense. Trade data adjustments reflected updated Census Bureau figures, with downward revisions to imports led by other goods. Consumer spending was revised downward, primarily due to declines in durable goods like jewelry, while services spending saw upward revisions in areas such as recreation and food services.
Investment estimates were revised downward, mainly due to nonresidential fixed investment, particularly in intellectual property products. Private inventory investment, however, was revised upward, reflecting increases in nonfarm inventories.
— news from Bureau of Economic Analysis