U.S. GDP up 2.8% in 2024, below the 2023 growth rate

U.S. real gross domestic product (GDP) rose 2.8% in 2024 thanks to gains in consumer spending, investments, government spending, and exports, according to the third estimate posted by the U.S. Bureau of Economic Analysis (BEA).

“From an industry perspective in 2024, private goods-producing industries increased 3.4%, private services-producing industries increased 2.8%, and government increased 1.9%,” the BEA noted in the report posted Thursday (March 27).

The 2024 price index for gross domestic purchases rose 2.4%, which was unchanged from the second estimate. The personal consumption expenditures price index was up 2.5%, and was up 2.8% excluding food and energy prices. Real gross domestic income was up 3% in 2024 compared with a 1.7% rise in 2023.

St. Louis Federal Reserve President Alberto Musalem said in a March 26 address that first quarter real GDP growth is “tracking lower,” with moderation in consumer spending. He also said consumer and businesses uncertainty about future economic conditions could be weighing negatively on the economy.

“Recently, we have also seen reports of growing caution among businesses,” he said in prepared remarks. “Our conversations with Eighth District firms suggest business leaders generally remain cautiously optimistic, but many comment that uncertainty about tariffs and other economic policies and their likely effects has made planning difficult. Until there is more clarity, many businesses have adopted a wait-and-see posture rather than going forward with significant new hiring or fixed investment.”

FOURTH QUARTER ESTIMATE
Fourth quarter 2024 real GDP rose 2.4% in the third estimate, which was up from 2.3% in the second estimate. The upward revision was driven primarily by an increase in consumer and government spending, according to the BEA.

However, fourth quarter GDP was down from 3.1% in the third quarter.

“Compared to the third quarter, the deceleration in real GDP in the fourth quarter primarily reflected downturns in investment and exports that were partly offset by an acceleration in consumer spending,” according to the BEA report.

Real gross domestic income was up 4.5% in the fourth quarter compared with an increase of 1.4% in the third quarter.

The third estimate for GDP by state is expected to be posted Friday (March 28). Arkansas’ third quarter real gross domestic product (GDP) of $149.1 billion grew at an annual rate of 6.9%, the most of any U.S. state, according to a Dec. 20 report from the BEA.