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  • U.S. GDP Growth Slowed In Q4 2024 To 2.3% Due To Falling Inventories


    U.S. gross domestic product grew by 2.3% in the fourth quarter of 2024 after expanding by 3.1% in the third quarter. Consumption, net exports, and government spending contributed positively to Q4 GDP growth, while investment detracted over a full percentage point primarily due to a decline in inventories. Despite expectations of solid U.S. economic growth in 2025, the Federal Reserve is likely to cut interest rates further before the end of the year.

    GDP Growth Slowed In The Fourth Quarter Of 2024

    The economy grew by 2.3% in Q4 2024, according to the latest Advance GDP report from the U.S. Bureau of Economic Analysis. This was the eleventh consecutive quarterly expansion in U.S. real GDP growth.

    At 2.3%, fourth-quarter growth was solid and close to consensus expectations, although the pace was slower than the 3.1% real GDP growth rate in the third quarter of 2024.

    This report provides further hope for a no-landing or soft-landing U.S. economic scenario despite relatively high interest rates. The ongoing strength of the labor market remains a significant factor supporting U.S. GDP growth.

    Mixed Contributions To Fourth Quarter GDP

    Contributions to Q4 2024 GDP were mixed. Consumption, net exports, and government spending added to GDP, while investment detracted from the Q4 figure. The 2.3% real GDP growth in the fourth quarter is a sum of the changes in these four series.

    On the upside, growth occurred across consumption, government spending, and net exports. Consumption added 2.82 percentage points to GDP, supported by solid services consumption, which added 1.45 of those percentage points. Goods consumption, which added 1.37 of consumption’s 2.82 percentage points, was fueled by solid retail sales growth.

    Meanwhile, government spending added 0.42 percentage points, and net exports added 0.04 percentage points.

    On the downside, inventories fell in the latest quarter, deducting 1.03 percentage points from GDP. A sharp decline in inventories was responsible for deducting 0.93 of those percentage points, while fixed investment declines were responsible for deducting only 0.1 percentage points.

    Despite the negative impact of inventories, overall GDP growth was solid in the fourth quarter. Moreover, key drivers of future U.S. economic growth are currently positive.

    Future GDP Expectations

    Multiple factors support a positive outlook for U.S. GDP in 2025, including low unemployment, low debt-to-income ratios, low debt delinquencies, and solid consumption. The IMF January 2025 forecasts reflect that U.S. GDP will grow by 2.7% in 2025, making the United States the fastest-growing advanced economy in the world this year.

    One gauge of future U.S. real GDP growth is the Atlanta Fed’s GDPNow series, which is an adaptive economic model based on the most recently available data for a given quarter. Ahead of the Q4 2024 GDP release, the GDPNow figure reflected expectations of 2.3% for Q4 GDP. This series has become a critical way to gauge upcoming GDP reports, and the latest report further supports its track record.

    Policy Expectations Following The Q4 2024 GDP Report

    U.S. growth has been solid and among the strongest of any advanced economy in the world. Plus, consumer inflation remains elevated. This combination of factors is likely to prevent the Fed from cutting interest rates on March 19.

    What do you think of the Q4 2024 U.S. GDP report?

    Let me know what you think in the comments below.

    Also, be sure to subscribe to my YouTube channel and visit Prestige Economics and The Futurist Institute for additional content about the economy, GDP, financial markets, and Fed policy.



    The United States Gross Domestic Product (GDP) growth slowed in the fourth quarter of 2024 to 2.3%, a significant drop from the previous quarter. The main factor contributing to this slowdown was falling inventories across various sectors of the economy.

    Inventory levels play a crucial role in determining overall economic growth, as businesses adjust their production and investment based on inventory levels. When inventories fall, it indicates that businesses are not producing as much or are selling their existing inventory without replenishing it, which can lead to slower economic growth.

    The decline in inventories in Q4 2024 likely reflects a combination of factors, including supply chain disruptions, labor shortages, and reduced consumer demand in certain sectors. These challenges have put pressure on businesses to adjust their production levels, leading to a drag on overall economic growth.

    While a slowdown in GDP growth is concerning, economists are optimistic that the underlying fundamentals of the U.S. economy remain strong. As supply chain issues are resolved and consumer demand rebounds, we may see a pickup in economic activity in the coming quarters.

    Overall, the slowing GDP growth in Q4 2024 serves as a reminder of the fragility of the economy and the importance of addressing key challenges to ensure sustained growth in the future.

    Tags:

    1. US GDP growth
    2. Q4 2024 economic update
    3. Falling inventories impact on GDP
    4. Economic growth trends
    5. US economy news
    6. GDP growth analysis
    7. Inventory impact on economic growth
    8. US GDP trends
    9. Economic indicators
    10. US economic performance

    #U.S #GDP #Growth #Slowed #Due #Falling #Inventories

  • Wall Street Traders Take GDP Report in Stride: Markets Wrap


    (Bloomberg) — Stock futures remained higher after the latest snapshot on the world’s largest economy did little to alter bets on the Federal Reserve rate path.

    Most Read from Bloomberg

    S&P 500 futures rose 0.3%. The yield on 10-year Treasuries declined two basis points to 4.51%. The Bloomberg Dollar Spot Index fell 0.1%.

    The US economy ended 2024 with solid, yet softer growth as a strike at Boeing Co. and leaner inventories diminished a generous tailwind from consumer spending. Inflation-adjusted gross domestic product increased an annualized 2.3% in the fourth quarter after rising 3.1% in the prior three-month period, according to the government’s initial estimate published Thursday. The median forecast in a Bloomberg survey of economists called for a 2.6% growth.

    Corporate Highlights:

    • The collision between an American Airlines Group Inc. regional jet and a military helicopter near Ronald Reagan airport in Washington left no survivors on board the two aircraft, authorities said, making it one of the most deadly US air disasters in decades.

    • Tesla Inc. plans to launch a long-promised robotaxi business and get back to growing vehicle sales after a year of decline in both deliveries and earnings.

    • Microsoft Corp. said its cloud-computing business will continue to grow slowly in the current quarter as the company struggles to build enough data centers to handle demand for its artificial intelligence products.

    • Meta Platforms Inc. Chief Executive Officer Mark Zuckerberg exuded confidence in his company’s artificial intelligence strategy, saying 2025 will be a “really big year” in which its AI assistant will become the most widely used in the industry.

    • Caterpillar Inc. warned that revenues will be “slightly lower” in 2025 as demand concerns weigh on the outlook of the heavy equipment maker.

    Key events this week:

    • US personal income & spending, PCE inflation, employment cost index, Friday

    Some of the main moves in markets:

    Stocks

    • S&P 500 futures rose 0.3% as of 8:30 a.m. New York time

    • Nasdaq 100 futures rose 0.5%

    • Futures on the Dow Jones Industrial Average fell 0.1%

    • The Stoxx Europe 600 rose 0.6%

    • The MSCI World Index rose 0.1%

    Currencies

    • The Bloomberg Dollar Spot Index fell 0.1%

    • The euro fell 0.1% to $1.0410

    • The British pound fell 0.1% to $1.2438

    • The Japanese yen rose 0.7% to 154.11 per dollar



    In a recent turn of events, Wall Street traders have taken the latest GDP report in stride, as markets remain relatively stable amidst economic uncertainty. The report, which showed a slight decrease in GDP growth, did not seem to faze investors who remain optimistic about the overall state of the economy.

    Despite concerns about inflation and supply chain disruptions, traders on Wall Street are staying calm and focused on the long-term prospects of the market. With the Federal Reserve expected to maintain its accommodative stance on monetary policy, investors are confident that the economy will continue to recover and grow.

    As the trading day comes to a close, major indices are holding steady, with some even posting modest gains. It seems that Wall Street traders are unfazed by the latest economic data and are choosing to focus on the bigger picture. Only time will tell how the markets will ultimately react to ongoing economic challenges, but for now, traders seem to be taking it all in stride.

    Tags:

    1. Wall Street traders
    2. GDP report
    3. Markets wrap
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    5. Economic indicators
    6. Financial markets
    7. Wall Street update
    8. Market analysis
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    10. Investment insights.

    #Wall #Street #Traders #GDP #Report #Stride #Markets #Wrap

  • GDP grew at a 2.3% pace in the fourth quarter, less than expected


    A worker sorts products during Cyber Monday at the Amazon’s fulfillment center in Robbinsville, New Jersey, U.S., November 27, 2023. 

    Mike Segar | Reuters

    U.S. economic growth slowed a bit more than expected in the final three months of 2024, the Commerce Department reported Thursday.

    Gross domestic product, a measure of all the goods and services produced across the sprawling U.S. economy during the period, showed that the economy accelerated at a 2.3% annualized pace in the fourth quarter. Economists surveyed by Dow Jones had been expecting an increase of 2.5% after growth of 3.1% in the third quarter.

    The report closes out 2024 on a somewhat downbeat note, though growth held reasonably solid. For the full year, GDP accelerated 2.8%, compared to 2.9% in 2023. Thursday’s release was the first of three estimates the department’s Bureau of Economic Analysis will provide.

    Growth held up largely on the backs of consumers who continued to spend briskly despite the ongoing burden of high prices on everything from homes to cars to eggs at the supermarket. While inflation is well off the boil from its mid-2022 40-year high, it remains a burden for households, particularly those on the lower end of the income scale.

    Consumer spending rose at a robust 4.2% pace and, as usual, 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%. Gross private domestic investment slumped by 5.6%, shaving more than a full percentage point off the topline number.

    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.

    At the recently concluded Fed meeting, central bankers gave no indication that they are expecting cuts anytime soon, with Chair Jerome Powell insisting that he is in no hurry to ease.

    Fed officials have been expressing some concern about whether the moves lower in inflation have stalled. Thursday’s report showed that the so-called chain-weighted price index, which measures prices and accounts for consumers substituting less expensive products for more costly items, increased 2.2% on the quarter, faster than the 1.9% move in Q3 but slightly below the 2.3% estimate.

    This is breaking news. Please refresh for updates.



    The latest economic data is in, and it appears that the Gross Domestic Product (GDP) grew at a 2.3% pace in the fourth quarter of last year. While this is certainly positive news, it falls short of the expected growth rate.

    Economists had predicted a higher growth rate for the fourth quarter, so this news may come as a bit of a disappointment to some. However, it’s important to keep in mind that the economy is a complex and ever-changing system, and not every prediction will be spot on.

    Despite falling short of expectations, a 2.3% growth rate is still a sign of a healthy economy. It indicates that businesses are expanding, consumers are spending, and overall economic activity is on the rise.

    As we move forward into the new year, it will be interesting to see how the economy continues to perform. Will we see a rebound in growth rates, or will there be further challenges ahead? Only time will tell.

    Tags:

    1. GDP growth
    2. Economic growth
    3. Fourth quarter GDP
    4. US GDP
    5. Economic news
    6. Economic trends
    7. GDP forecast
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    9. Quarterly GDP report
    10. Economic analysis

    #GDP #grew #pace #fourth #quarter #expected

  • Real GDP, Construction, and Real Estate Insights


    Real GDP of metropolitan areas rose 2.7% in 2023, with the “real estate, rental and leasing” sector contributing 0.34 percentage points and construction contracting growth by 0.11 percentage points. While many metro areas followed the national growth trend, each region has its unique economic narrative. This article explores the economic trends driving these outcomes, focusing on the leading metro areas in real GDP growth, the construction sector’s standout performers over a five-year period, and the top MSAs benefiting from growth in real estate, rental, and leasing.

    In 2023, real GDP increased in 348 Metropolitan Statistical Areas (MSAs), decreased in 34 MSAs, and remained unchanged in 3 MSAs, according to the U.S. Bureau of Economic Analysis (BEA). The data, which was recently released in December 2024, shows the range of growth spanned from 42.9% in Midland, TX, to a contraction of -9.3% in Elkhart-Goshen, IN. Three MSAs—Ithaca, NY, Joplin, MO, and Longview, WA—saw no change in real GDP.

    The oil and gas sector played a significant role in driving growth in many MSAs. Midland, TX, recorded the highest growth due to a surge in oil production, with the “mining, quarrying, and oil and gas extraction” industry contributing a hefty 41.2 percentage points to the metro area’s GDP growth. Furthermore, among the top five highest growth areas, four had this industry as the leading contributor.

    Top Five MSAs by Real GDP Growth and Leading Contributing Industry

    Metro Area 2023 Real GDP Growth (%) Largest Contributing Industry Contribution (Percentage Points)
    Midland, TX 42.9 Mining, quarrying, and oil and gas extraction 41.2
    Greeley, CO 18.5 Mining, quarrying, and oil and gas extraction 15.5
    El Centro, CA 16.4 Agriculture, forestry, fishing, and hunting 14.4
    Odessa, TX 11.6 Mining, quarrying, and oil and gas extraction 7.1
    Wheeling, WV-OH 10.7 Mining, quarrying, and oil and gas extraction 9.9

    Construction Sector Growth (2018–2023)

    From 2018 to 2023, the construction industry exhibited a mixed performance, with 140 MSAs reporting positive compound annual growth rates (CAGR), 188 recording declines, and 5 showing no change. States like Idaho, Arizona, and Florida emerged as hotspots for construction growth during this period while states in the East North Central division appear to have slowdowns in this sector.

    Elizabethtown-Fort Knox, KY, led with a 14.4% CAGR in construction. This boom was primarily driven by the development of the BlueOval SK Battery Park, slated to begin production in 2025. This joint venture between Ford Motor Company and SK On, a South Korean electric vehicle (EV) supplier, is expected to be the largest EV battery manufacturing facility globally.

    According to a study by the Hardin County Chamber of Commerce (HCCC), the project is estimated to:

    • Generate $1.6 billion in construction payroll.
    • Create 5,000 jobs by the end of 2025.
    • Require 3,100 additional housing units to accommodate new workers.

    Top Five MSAs for Construction Growth (2018–2023):

    Metro Area CAGR (%) Average Contribution (Percentage Points)
    Elizabethtown-Fort Knox, KY 14.4 0.45
    Clarksville, TN-KY 10.8 0.03
    Punta Gorda, FL 10.6 1.12
    Jacksonville, NC 10.2 0.32
    The Villages, FL 10.1 1.23

    Real Estate, Rental, and Leasing Growth (2018–2023)

    The real estate, rental, and leasing sector also showed robust growth in many regions, with 209 MSAs experiencing positive growth during the five-year period. The Villages, FL, recorded the highest CAGR at 14.1%, reflecting its status as the nation’s largest community designed for an aging population.

    Other MSAs like Jonesboro, AR, saw significant real estate growth due to proximity to Arkansas State University, while Austin-Round Rock-Georgetown, TX, benefited from a population influx because of its thriving tech economy.

    Top Five MSAs for Real Estate Growth (2018–2023):

    Metro Area CAGR (%) Average Contribution (Percentage Points)
    The Villages, FL 14.1 3.6
    Jonesboro, AR 12.1 1.2
    Twin Falls, ID 10.8 1.1
    Austin-Round Rock-Georgetown, TX 10.7 1.4
    El Centro, CA 10.6 0.6

    Visit NAHB’s dashboard for additional data and visualizations on demographics, housing market and the economy for all metro areas.

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    Real GDP, Construction, and Real Estate Insights

    In recent years, the relationship between real GDP, construction, and real estate has become increasingly intertwined. As the economy grows, so does the demand for new construction projects and real estate developments. This symbiotic relationship has important implications for investors, policymakers, and the overall health of the economy.

    One key insight is that real GDP growth can serve as a leading indicator for construction and real estate activity. When the economy is expanding, businesses are more likely to invest in new construction projects, such as office buildings, warehouses, and residential developments. This, in turn, boosts demand for construction materials, labor, and services.

    Additionally, real estate values tend to rise during periods of economic growth, as consumers have more disposable income to spend on homes and commercial properties. This can create opportunities for investors looking to capitalize on the appreciation of real estate assets.

    Conversely, a slowdown in real GDP growth can have negative effects on the construction and real estate sectors. Reduced consumer spending and business investment can lead to a decrease in demand for new construction projects and real estate developments. This can result in lower property values, decreased construction activity, and job losses in the construction industry.

    Overall, understanding the relationship between real GDP, construction, and real estate can provide valuable insights for investors, policymakers, and businesses looking to navigate the complexities of the modern economy. By keeping a close eye on these key indicators, stakeholders can make informed decisions and position themselves for success in an ever-changing market.

    Tags:

    1. Real GDP analysis
    2. Construction industry trends
    3. Real estate market updates
    4. Economic insights on Real GDP
    5. Impact of construction on Real GDP
    6. Real estate sector analysis
    7. Growth trends in construction and real estate
    8. Economic indicators for Real GDP
    9. Real estate market forecast
    10. Construction industry statistics

    #Real #GDP #Construction #Real #Estate #Insights

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