Macro Flash Report

Gross Domestic Product (GDP)

Takeaway:

4Q24 GDP came in slightly below market expectations but above long run growth potential, at 2.3%. Underlying growth from the consumer continues to be robust and encouraging going into 2025.

 

QoQ GDP % – Inventories, Consumption, Investment, Government, Net Exports

The preliminary results for Q4 2024 GDP showed that the economy grew at an annualized rate of 2.3%, down from 3.1% in Q3 and below the market expected 2.7% advance. This marks the slowest growth in three quarters, yet it remains a solid pace of expansion, driven primarily by consumer spending.

Key Components:

  • Personal spending continued to be the main boost, accelerating by 4.2%, up from 3.7% in Q3 2024. This marks the fastest pace since Q1 2023, driven by spending on both goods (6.6% vs 5.6%), particularly for durable goods (12.1% vs 7.6%), and services (3.1% vs 2.8%).
  • Fixed investment contracted for the first time since Q1 2023 (-0.6% vs 2.1%), while residential investment rebounded (5.3% vs -4.3%).
  • Net trade was little changed as both exports (-0.8% vs 9.6%) and imports (-0.8% vs 10.7%) contracted.
  • Government spending increased, yet at a slower pace (2.5% vs 5.1%).
  • Private inventories were a drag, cutting 0.93 percentage points from growth.