Real GDP grew at an annual rate of 2.3% in the fourth quarter of 2024, according to the “advanced” estimate released by the Bureau of Economic Analysis. Real GDP increased 3.1% in the third quarter of 2024.
The increase in real GDP in the fourth quarter primarily reflected increases in consumer spending and government spending that were partly offset by a decrease in investment. Imports, which are a subtraction in the calculation of GDP, decreased. Compared to the third quarter, the deceleration in real GDP in the fourth quarter primarily reflected downturns in investment and exports. Imports turned down. The price index for gross domestic purchases increased 2.2 percent in the fourth quarter, compared with an increase of 1.9 percent in the third quarter.
Consumption added 2.82 percentage points (pp) to growth, following a 2.48 pp addition in the third quarter of 2024. The increase in PCE was driven by services (1.45 pp) such as those in household consumption expenditure: healthcare (0.46 pp), other services (0.31 pp), and financial services and insurance (0.18 pp). Goods added (1.37 pp) to real GDP which included recreational goods and vehicles (0.34 pp), motor vehicles and parts (0.33 pp), and other nondurable goods (0.29 pp). Clothing and footwear added (0.13) pp from real GDP, respectively.
Business investment subtracted 1.03 pp to real GDP. Nonresidential fixed investment subtracted 0.31 pp, with equipment and transportation equipment subtracting 0.42 pp and 0.19 pp, respectively, and information processing equipment subtracting 0.18 pp. Other equipment and structures subtracted 0.08 pp and 0.03 pp respectively. Residential fixed investment added 0.21 pp.
Government spending added 0.42 pp to real GDP. The Federal government added 0.21 pp to real GDP while state and local added 0.22 pp.
Exports subtracted 0.08 pp to real GDP while imports added 0.12 pp.
Read the BEA release.
