U.S. GDP Growth Slowdown Is Unrevised in Q4’24

Real GDP growth of 2.3% (SAAR) last quarter was unrevised from the estimate issued last month. It followed a 3.1% gain in the third quarter and 3.0% growth in Q2. The increase matched expectations in the Action Economics Forecast Survey. Growth during the four quarters of 2024 fell to 2.5% from 3.2% in 2023.

Business inventories subtracted 0.81 percentage point from growth, revised from a 0.93 percentage point subtraction estimated earlier. That came after subtracting 0.22 point from Q3 growth. It was the largest subtraction since Q1’23. Net exports added 0.12 percentage point to growth last quarter, revised from 0.04 point, after subtracting 0.43 point in Q3. Exports eased a little-changed 0.5% last quarter (+2.9% y/y). Imports fell 1.2% (+5.7% y/y) last quarter, revised from a 0.8% fall, after rising 10.7% in Q3.

Private domestic final demand increased 3.0% (3.0% y/y), revised from 3.1%, in Q4 after rising 3.4% in Q3. It was powered by an unrevised 4.2% surge (3.1% y/y) in personal consumption expenditures, which followed a 3.7% advance in Q3. Durable goods buying surged 12.1% (5.7% y/y) after a 7.6% gain driven by motor vehicle spending (6.4% y/y), recreational goods buying (6.0% y/y) and home furnishings & appliance purchases (5.7% y/y). Nondurable goods spending rose a lessened 3.0% (2.1% y/y) as clothing, as well as “other” nondurables purchases, surged. Services spending growth improved an upwardly revised 3.3% (3.1% y/y) reflecting strength in healthcare, financial services and spending at restaurants & hotels. Residential investment grew a minimally changed 5.4% (2.8% y/y) after declining 4.3% in Q3. The 3.2% decline (+2.2% y/y) in business fixed investment was revised from a 2.2% shortfall. Structures investment was revised to a moderate rise from a decline as investment in equipment fell 9.0% (+2.7% y/y) and reversed all but a bit of the prior quarter’s increase. Information processing equipment fell sharply (+5.1% y/y) but investment in intellectual property was revised down to unchanged (+2.8% y/y) after rising 3.1% in Q3.

Government spending rose 2.9% (3.2% y/y), revised from 2.5%, last quarter after increasing 5.1% in Q3, as federal government outlay growth remained firm at 4.0% (4.2% y/y) with higher defense spending (5.5% y/y). State & local government spending growth was revised up to 2.2% (2.6% y/y) from slight declines.

The GDP price index rose 2.4% (2.5% y/y), revised from 2.2%, last quarter after a 1.9% Q3 gain. A 2.2% rise had been expected. The PCE price index moved up 2.4% (2.5% y/y), revised from 2.3%, after a 1.5% Q3 rise. The price index less food & energy increased 2.7% (2.8% y/y), revised from 2.5% after a 2.2% gain. The business fixed investment price index rose 1.7% (2.1% y/y), revised from 1.4%, and the residential price index improved 2.0% (2.1% y/y), revised from a 1.7% rise. The government price index increased 2.2% (2.6% y/y), revised from 2.4%, down from 2.4% in Q3.

The GDP data can be found in Haver’s USECON and USNA databases. USNA contains virtually all of the Bureau of Economic Analysis detail in the national accounts. The Action Economics consensus estimates can be found in AS1REPNA.