US economy grows 2.4% in This autumn, uncertainty looms amid inflation concerns

The US economy expanded at a wholesome annual charge of two.4% in the ultimate quarter of 2024, in accordance with a slight improve in the federal government’s development estimate launched on Thursday.
The development was pushed by a robust year-end surge in shopper spending, regardless of challenges posed by a slowdown in enterprise funding and declining inventories.
The enhance in Gross Domestic Product (GDP) was down from a 3.1% tempo in the third quarter, signalling a deceleration in development. The general 2024 economy grew by 2.8%, barely down from 2.9% in 2023, information company AP reported.
Consumer spending was a key driver, rising at a 4% tempo in the fourth quarter, up from 3.7% in the third quarter. However, enterprise funding fell, with a notable 8.7% drop in funding in tools. A decline in enterprise inventories contributed to a 0.84 proportion level discount in GDP development for the quarter.
A key measure of the economy’s underlying energy, which excludes unstable elements corresponding to exports, inventories, and authorities spending, confirmed a wholesome 2.9% annual development charge in This autumn, barely revised down from the earlier estimate of three.2%. This was additionally decrease than the three.4% tempo recorded in Q3.
While shopper spending supplied a lift, inflationary pressures continued to rise towards the tip of 2024. The Federal Reserve’s most well-liked inflation gauge, the non-public consumption expenditures (PCE) worth index, rose at an annual charge of two.4%, up from 1.5% in the third quarter and exceeding the Fed’s 2% goal. Core PCE inflation, which excludes unstable meals and vitality costs, registered 2.6%, up from 2.2% in the prior quarter.
Despite the sturdy end to 2024, the outlook for 2025 stays unsure, significantly with the commerce insurance policies of President Donald Trump. His resolution to impose new tariffs — together with a 25% tax on imported vehicles — may result in increased inflation and disrupt enterprise funding, threatening future development.
The fourth-quarter GDP knowledge displays the economy earlier than the surge in coverage uncertainty and commerce tensions escalated, significantly below Trump’s administration. As Ryan Sweet, Chief US Economist at Oxford Economics, famous, “The combination of policy uncertainty, tariffs, and tightening financial market conditions are weighing on growth early this year.”
In addition to commerce concerns, US shopper confidence has dropped sharply, pushed by fears of inflation and the affect of tariffs. Major retailers have adjusted their expectations for 2025, with some warning that customers are already curbing their spending. As the yr progresses, the financial panorama may face further challenges from each home and worldwide pressures.