The US economy ended 2024 on a solid note with consumer spending driving growth, expanding at a 2.3% annual rate from October to December. For the full year, the economy grew 2.8%, beating expectations of 2.9%. Consumer spending increased by 4.2%, its fastest pace since January-March 2023.
However, business investment declined as equipment investment plummeted after two strong quarters. Persistent inflationary pressure was also evident, with the personal consumption expenditures index rising to a 2.3% annual pace last quarter, above the Federal Reserve’s 2% target.
Despite these challenges, the economy remains resilient. The underlying strength of the economy rose at a healthy 3.2% annual rate from July to September, excluding volatile items. GDP growth could be influenced by President Trump’s plans to cut taxes and ease regulations on business, which may speed up GDP growth but also lead to higher prices.
The Federal Reserve left its benchmark interest rate unchanged after making three cuts since September. However, the economy’s outlook has become more cloudy with Trump’s policies potentially slowing growth and higher inflation.
Source: https://apnews.com/article/economic-growth-economy-powell-trump-0d5ada55414b7178b399bc781ab54a01