Real gross domestic product (GDP) in the United States increased by 2.8% in 2024, slightly lower than the 2.9% growth recorded in 2023. In the fourth quarter of 2024, real GDP expanded at an annualized rate of 2.3%, down from 3.1% in the third quarter, according to the advance estimate released by the U.S. Bureau of Economic Analysis.
The fourth-quarter growth was primarily driven by increases in consumer spending and government expenditures. These gains were partially offset by a decline in investment. Imports, which reduce GDP calculations, decreased. Compared to the previous quarter, GDP growth slowed due to downturns in investment and exports, while imports also turned down.
The price index for gross domestic purchases rose by 2.2% in the fourth quarter, up from 1.9% in the third quarter. The personal consumption expenditures (PCE) price index increased by 2.3%, compared to 1.5% in the prior quarter. Excluding food and energy, the PCE price index climbed 2.5%, higher than the 2.2% recorded in the third quarter.
For the full year, GDP growth was fueled by expansions in consumer spending, investment, government spending, and exports. Imports also increased. Inflationary pressures eased in 2024, with the price index for gross domestic purchases rising 2.3%, down from 3.3% in 2023. The PCE price index increased 2.5%, compared to 3.8% in the previous year. Excluding food and energy, the PCE price index rose 2.8%, a decline from 4.1% in 2023.
