FX.co ★ US GDP Growth Revised Higher in Q4

The United States economy grew at an annualized rate of 2.4% in the fourth quarter of 2024, which is a slight increase from the previous estimate of 2.3%. This adjustment is largely attributed to a revision in import figures. Exports showed a minor decline of 0.2%, compared to the previously estimated 0.5%, while imports decreased more significantly than initially expected, dropping by 1.9% instead of the forecasted 1.2%. As a result, net trade contributed positively to the economy by 0.26 percentage points, up from 0.12 percentage points. Government spending also increased more than anticipated, rising by 3.1% compared to an earlier estimate of 2.9%. Fixed investment saw a milder contraction of 1.1%, compared to the previously reported 1.4%, largely due to equipment investments that decreased by 8.7%, slightly better than the anticipated 9% drop. However, investments in intellectual property products saw a reduction of 0.5%, contrary to earlier predictions of no change. Residential investment grew at a faster rate of 5.5%, compared to the initial projection of 5.4%. Personal consumption remained the primary engine of growth, increasing by 4%, slightly down from an initial estimate of 4.2%, yet still marking the most substantial gain since the first quarter of 2023. Consumer spending increased for both goods, which rose by 6.2% compared to 6.1%, and services, which saw a 3% rise versus the previously estimated 3.3%. Lastly, private inventories reduced growth by 0.84 percentage points, slightly more than the 0.81 percentage points previously estimated.