During the last quarter of 2024, the economy of the United States grew at an annualized pace of 2.3%, according to the Bureau of Economic Analysis. This expansion rate was below the expected 2.6% and signaled a slowdown compared to the 3.1% increase noted in the previous quarter.
Primary Factors of Economic Expansion
Growth in the fourth quarter was mainly fueled by a rise in consumer spending and government outlays. As a major factor of the Gross Domestic Product (GDP), consumer spending stayed strong, indicating continued household consumption. Government outlays also played a positive role, with significant boosts in federal and state spending.
Quarterly Comparison Analysis
Comparative Analysis with Previous Quarters
Elements Leading to the Deceleration
Numerous factors played a role in the tempered growth seen in the fourth quarter:
- Reduction in Investment: A downturn in investment activities partially counteracted the benefits from consumer and government expenditure.
- Trade Factors: Imports saw a decline in this time frame, which, though a negative in GDP calculation, suggests possible changes in local demand and global supply chain modifications.
Inflation Pressures and Policy Consequences
Ongoing inflation continues to be worrisome, as the Consumer Price Index (CPI) increased to 2.9% in December 2024. This rise in inflation has prompted economists to revise their projections, expecting sustained price pressures over the next year. The Federal Reserve is tasked with the challenge of managing inflation control measures while avoiding hindrances to economic growth.
Summary of the Labor Market
A pesar de preocupaciones previas, el mercado laboral mostró resistencia, con la tasa de desempleo bajando a 4.1% en diciembre de 2024. No obstante, las proyecciones indican un leve aumento en el desempleo para finales de 2025, reflejando posibles ajustes en el mercado laboral mientras la economía enfrenta desafíos continuos.
Prospects for 2025
Mirando al futuro, las perspectivas económicas para 2025 muestran un panorama mixto:
Looking ahead, the economic outlook for 2025 presents a mixed picture:
- Growth Projections: The Congressional Budget Office (CBO) projects a moderation in economic growth, with GDP expected to increase by 1.9% in 2025, down from an estimated 2.3% in 2024.
- cbo.gov
- Inflation Expectations: Economists anticipate that inflation will remain above the Federal Reserve’s 2% target, influenced by factors such as ongoing supply chain disruptions and policy decisions.
- reuters.com
- Policy Considerations: Proposed tariffs and stricter immigration policies could exert additional inflationary pressures and impact labor market dynamics, necessitating careful monitoring and policy adjustments.
