Real GDP grew at an annual rate of 2.4% in the fourth quarter of 2024, according to the “third” 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. Real GDP was revised up 0.1 percentage point (pp) from the second estimate, primarily reflecting a downward revision to imports. Compared to the third quarter, the deceleration in real GDP in the fourth quarter primarily reflected downturns in investment and exports that were partly offset by an acceleration in consumer spending. The personal consumption expenditures (PCE) price index increased 2.4%, the same as previously estimated. Excluding food and energy prices, the PCE price index increased 2.6%, revised down 0.1 pp from the previous estimate.
Consumption added 2.70 pp to growth, following a 2.48 pp addition in the third quarter of 2024. The increase in PCE was driven by services (1.41 pp) such as those in household consumption expenditure: healthcare (0.53 pp), other services (0.28 pp), and financial services and insurance (0.16 pp). Goods added (1.30 pp) to real GDP which included motor vehicle and parts (0.46 pp), recreational goods and vehicles (0.30 pp), and other nondurable goods (0.28 pp). Clothing and footwear added (0.09) pp from real GDP.
Business investment subtracted 1.03 pp to real GDP. Non-residential fixed investment subtracted 0.41 pp, while structures added 0.09 pp. Equipment and transportation equipment subtracting 0.47 pp and 0.23 pp, respectively. Information processing equipment subtracting 0.13 pp, and other equipment subtracted 0.10 pp. Residential fixed investment did not add to GDP this quarter.
Government spending added 0.52 pp to real GDP. The Federal government added 0.25 pp to real GDP while state and local added 0.27 pp.
Exports subtracted 0.01 pp to real GDP while imports added 0.27 pp.
Read the BEA release.
