The US economy has slowed down: GDP at the end of 2024 below forecasts, but recession risk in the new year is low for the US
Kyiv • UNN
US GDP in the fourth quarter of 2024 grew by 2.3% instead of the expected 2.7%. For the whole year, the economy grew by 2.8%, which is lower than in 2023 but higher than in 2022.
In the fourth quarter of last year, the US real gross domestic product grew by 2.3% year-on-year, which is less than the forecast of 2.7%.
Reported by UNN with reference to Bureau of Economic Analysis and Business Insider.
The preliminary estimate of the U.S. gross domestic product (GDP) for the fourth quarter, which was conducted by the Bureau of Economic Analysis, showed that the U.S. economy grew by 2.3% year-on-year.
This figure is less than previously forecasted - it is lower than the 2.6% expected by economists surveyed by Bloomberg. In addition, it turns out that this figure is lower than the 3.1% growth seen in the third quarter of 2024.
For the year, the US economy grew by 2.8%, slightly lower than the 2.9% in 2023, but higher than the 2.5% growth in 2022.
Experts in economic analysis note that US consumers continued to drive overall economic growth. At the same time, employment and wage growth remained stable.
Matt Kolar, an economist at Moody's Analytics, told Business Insider before the release of new GDP data from the Bureau of Economic Analysis that the economy in 2024 was strong.
Inflation is still above the Fed's target, but it has slowed over the year, and this happened without a significant increase in unemployment. The rise in unemployment was driven by an increase in labor supply
The average monthly job growth in 2024 was 186,000, personal spending continued to grow, and a recession was avoided.
At the beginning of 2025, when the second administration of President Donald Trump began its work, some economists believed that the risk of a recession in the new year was quite low. But they also took into account other factors.
Explains Elizabeth Tenant, senior economist at Nerdwallet:
The problem is that we do not know much about how the year will unfold. Some potential measures, such as tariffs, are likely to be inflationary. Others, such as those that could lead to a reduction in the labor force, could slow economic growth. Most potential economic policies will take time to implement and even longer to have an impact on the economy
Recall
Scott Bessent, the newly appointed US Treasury Secretary, proposes to introduce universal tariffs on imports, starting at 2.5%. The tariffs are planned to be gradually increased every month to allow businesses to adapt.
The European Commission plans to cut administrative costs for companies by 25% and for small businesses by 35%. The plan is aimed at stimulating innovation and increasing competitiveness with China and the United States.