Q4 GDP declined, consumer spending grew 

While the figure may show consumer resilience, some argue the boost in spending is just a reflection of higher prices

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Advance Q4 GDP estimates show growth slowed more than expected at the end of 2024, but annual growth still came in at a healthy level. 

The Bureau of Economic Analysis says the US economy grew by 2.8% in 2024, down slightly from 2023, which saw a 2.9% increase. 2% is the accepted threshold for developed countries. 

Inflation-adjusted GDP for the final months of 2024 came in at 2.3%, lower than projections of 2.4%. Q3 GDP was adjusted to 3.1% growth. 

Personal spending in Q4 was up again, coming in at 4.2% annualized. Consumers spent the most on healthcare and recreational goods and vehicles, the report showed. 

While the figure may show consumer resilience, some argue the boost in spending is just a reflection of higher prices. 

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The figures come on the heels of the latest FOMC decision to hold interest rates. Chair Powell yesterday took a more dovish stance, reiterating that central bankers are in no hurry to lower rates.

Looming tariff policies also contribute to economic uncertainties, Powell added. Duration, size, targeted nations and consumer impact are all up in the air, making forecasting a challenge. 

Imports were down slightly in the fourth quarter, BEA data showed. Inventories also fell, subtracting from GDP. Both will be key figures to watch as Trump’s tariff plans take shape. 


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