US real GDP growth was 2.3% in Q4 2024, down from 3.1% in Q3 2024 and below the forecast of 2.6%. Personal consumption boomed, growing at an annual pace of 4.2%, the fastest growth since Q1 2023 with goods spending growth at 6.6% and services spending growth at 3.1%.

Offsetting the increase in consumption was a -5.6% decline in gross private domestic investment, the first decline since Q1 2023. Nonresidential investment fell at a -0.6% annual rate with equipment investment falling the most at -7.8%. Residential investment bounced back after two quarters of contraction, increasing at a 5.3% rate. Government consumption growth slowed but was still positive at 2.5%.

The GDP Price Index came in cooler than expected at a 2.2% annual rate, below expectations of a 2.5% annual rate, in Q4 2024. Core PCE prices expanded at a 2.5% annual rate, a slight acceleration from the 2.2% rate in Q3 2024. In general, inflationary pressures were just above the Fed’s target, slightly accelerating from the weaker pressures in Q3.