US economic growth slows to 2.3% in Q4 2024

The US economy slowed more than expected in the fourth quarter of 2024, as exports and investment shrank and imports fell, giving the Federal Reserve room to continue its monetary easing.

Official data showed on Thursday that the US gross domestic product, measured in real prices, rose 2.3% year-on-year in Q4 2024, after increasing 3.1% in the previous quarter, compared to expectations for a slowdown to 2.5%.

At the level of 2024 as a whole, growth rate of the world’s largest economy fell slightly to 2.8% from 2.9% in 2023.

The slower pace of the US economic growth QoQ was due to a contraction in investment and exports, offset by a decline in imports, the Commerce Department’s Bureau of Economic Analysis said.

Meanwhile, the increase in GDP over the three-month period came thanks to higher consumer and government spending and lower imports. However, the positive impact was offset by lower investment.

Today’s data is the first of three GDP readings the bureau has released, each of which includes a revision of the sources used.

The data also showed the GDP purchase price index, a measure of inflation, rose 2.2% in Q4 2024, accelerating from 1.9% in Q3 2024.