America’s GDP Grew 2.5% In 2024, Down From 3.2% Growth In 2023

The US GDP grew a modest 2.5% in 2024, a number slowed slightly by the final quarter of the year. The number was boosted by American consumers who, despite high costs, continued to spend.

This was a slower growth rate than the 3.2% the American economy grew in 2023, but it was still a higher rate than most of the West. “Today’s GDP report confirms that the U.S. economic expansion continued apace into the end of 2024 on relatively firm footing,” wrote Mike Reynolds, vice president of investment strategy at Glenmede.

Consumer spending rose at a robust 4.2% pace and amounted to about two-thirds of all activity. Government spending also provided a boost, accelerating at a 3.2% level.Trade was a drag on growth in the period, with imports, which subtract from the GDP calculation, off 0.8%. Exports also declined 0.8%.

The resilience of the U.S. economy and the relative deceleration in inflation has allowed the Federal Reserve to assume a patient stance on monetary policy. Though the Fed cut its key interest rate by a full percentage point in the last four months of 2024, officials have indicated that aggressive reductions are unlikely this year.

While the overall picture of the US economy is quite strong and stable, many Americans have not felt as prosperous as the statistics claim they are. Inflation, which has slowed from its high about a year and a half ago, continues to make many Americans feel that they have less purchasing power than they used to.