The US economy just had another robust year

Washington
CNN
 — 

Another year of robust economic growth is in the books, underscoring how the Biden administration handed President Donald Trump what many consider a solid economy.

The US economy grew 2.5% over the past year, according to new Commerce Department figures released Thursday, comparing the fourth quarter in 2024 with the one from a year earlier. A resilient labor market supported strong consumer spending last year. Americans’ spending accounts for about 70% of the US economy. Business investment also fueled growth in 2024.

The economy expanded at an annualized rate of 2.3% in the fourth quarter, as measured by gross domestic product, the broadest measure of economic output. Though that was slightly below economists’ expectations of a 2.4% rate, according to FactSet. The figures are adjusted for seasonal swings and inflation.

The latest GDP report comes on the heels of the Federal Reserve’s latest policy decision announced Wednesday. The central bank opted to hold its key interest rate steady, following three back-to-back rate cuts last year.

While Fed officials seem inclined to hold off on further rate cuts for the next few months, Fed Chair Jerome Powell in his post-meeting news conference said the US economy remains in a good place, with a steady labor market and inflation that seems on track to slow further. He also noted that the strong numbers in the aggregate are masking some economic pain under the surface.

Economists broadly expect the US economy to continue with its expansion in 2025, but the one wild card is the economic effect of Trump’s policies, which include mass deportations, stiff tariffs and making his 2017 tax cuts permanent.

This story is developing and will be updated.