US Economic Growth Drops to 2.3% in 2024

US economy slowed to 2.3% growth in late 2024, impacted by trade declines, strikes, and hurricanes.

The US economy began to slow down during the last quarter of 2024 as its growth expanded at an annual rate of 2.3%, lower than 3.1% from the previous quarter. The figures were reported by the US Commerce Department, indicating that growth declined as a result of trade dropping, investment dwindling, and being hampered by hurricanes and labor strikes.

Consumer spending rose 4.2%, stronger than forecasters had expected, but not strong enough to drive the economy up to economists' expectations. That was because goods purchases, such as cars, surged, something analysts believe could have been triggered by fears that future tariffs will be imposed. Economist Samuel Tombs at Pantheon Macroeconomics said the surge in consumer spending might be temporary and may not be indicative of the longer-term trends in domestic demand. Private investment also declined, and analysts tied this to the aerospace strike at Boeing, which probably caused some production disruptions.

In this regard, it was further found that the declines in both exports and imports have not greatly influenced the aggregate growth figures. Healthy consumer spending cushioned trade and investment slowdowns, but pervasive uncertainty regarding policy changes across the US hovers over everything.

This weaker-than-expected economic growth comes amid increased uncertainty over policy changes planned by President Donald Trump. Trump plans to push significant cuts in government spending and a series of trade tariffs, possibly unveiled in the coming week.

Despite the slowdown, analysts remained cautiously optimistic. Ellie Zentner, the chief economic strategist for Morgan Stanley Wealth Management, says the growth last year was "surprisingly strong," citing wealth creation, a robust labor market, and lending as continuing to back consumer activity. Yet, analysts caution that the preliminary figures could be revised in light of the disruption caused by the autumn hurricanes.