U.S. economy grows 2.3% in Q4 2024 driven by consumer spending

The U.S. economy closed 2024 on a strong note, with a 2.3% annual growth rate in the fourth quarter, driven mainly by robust consumer spending, which increased by 4.2%. Despite this growth, business investment saw a decline, particularly in equipment, and inflationary pressures remain persistent, with the personal consumption expenditures index rising to 2.3%. The Federal Reserve opted to keep interest rates unchanged at 4.25% to 4.5%, signaling caution amid ongoing economic uncertainty influenced by the new Trump administration's policies. Economists suggest that the economy remains resilient despite disruptions from events like strikes and hurricanes, and the underlying strength of the economy is indicated by a 3.2% growth in final sales to private domestic purchasers. However, Trump’s proposed policies, including potential import tariffs and mass deportations, could pose risks to future economic stability and growth. Overall, the economic landscape remains optimistic yet cautious as the new administration's decisions unfold.