The American economy ended 2024 on a solid note with consumer spending continuing to drive growth.
The Commerce Department reported Thursday that gross domestic product—the economy’s output of goods and services—expanded at a 2.3% annual rate from October through December.
For the full year, the economy grew a healthy 2.8%, compared with 2.9% in 2023.
The fourth-quarter growth was a tick below the 2.4% economists had expected, according to a survey of forecasters by the data firm FactSet.
Consumer spending grew at a 4.2% pace, fastest since January-March 2023 and up from 3.7% in July-September last year. But business investment tumbled as investment in equipment plunged after two straight strong quarters.
Wednesday’s report also showed persistent inflationary pressure at the end of 2024. The Federal Reserve’s favored inflation gauge—called the personal consumption expenditures index, or PCE—rose at a 2.3% annual pace last quarter, up from 1.5% in the third quarter. Excluding volatile food and energy prices, so-called core PCE inflation was 2.5%, up from 2.2% in the July-September quarter.
