US Economy Grows at Slower Pace in Q4, Fueled by Consumer Spending
The US economy expanded at a slower-than-anticipated pace in the fourth quarter of 2024. According to the Bureau of Economic Analysis's preliminary estimates, GDP grew at an annualized rate of 2.3%, falling short of the Bloomberg consensus forecast of 2.6%. This marks a moderation from the 3.1% growth observed in Q3.
Consumer and government spending drove economic activity, while investment declines tempered gains. Notably, the "core" Personal Consumption Expenditures index, excluding volatile food and energy components, increased by 2.5% in Q4, meeting expectations and exceeding the previous quarter's 2.2% rise.
The release of this data comes amidst market speculation about the Federal Reserve's monetary policy trajectory. Following the Fed's decision to hold interest rates steady on Wednesday, Chair Jerome Powell indicated that the economy "remains strong" despite "somewhat elevated" inflation.
As of Wednesday, CME FedWatch Tool data suggests less than a 50% probability of the Fed easing rates before its June meeting.
This continues to be a developing story; further updates will be provided as they become available.