U.S. GDP Grows Amid Consumer Spending and Exports

The U.S. economy grew at an annualized rate of 2.8% in the third quarter of 2024, according to the Bureau of Economic Analysis' advance estimate.

The U.S. economy grew at an annualized rate of 2.8% in the third quarter of 2024, according to the Bureau of Economic Analysis' advance estimate. This follows a 3.0% increase in Q2, marking a slight slowdown in growth. The increase in real GDP was largely supported by gains in consumer spending, exports, and federal government spending, with a notable rise in imports, deducted in the GDP calculation, and also contributing.

Consumer spending saw growth across both goods and services. Within goods, significant contributions came from nondurable goods, such as prescription drugs, and motor vehicles. On the services side, key areas of growth included health care, particularly outpatient services, and food services. The increase in exports was driven by capital goods, excluding automotive, while federal government spending surged primarily due to defense expenditures.

The deceleration in GDP growth compared to Q2 was attributed to reduced private inventory investment and a sharper decline in residential fixed investment. Despite these declines, growth in exports, consumer spending, and federal government spending helped to moderate the slowdown. Imports continued to accelerate during the quarter.

Inflation metrics showed a cooling trend, with the GDP price index for gross domestic purchases rising 1.8% in Q3, down from 2.4% in Q2. The personal consumption expenditures (PCE) price index rose by 1.5%, compared to a previous increase of 2.5%. Excluding food and energy, the core PCE price index climbed 2.2%, marking a decline from 2.8% in the previous quarter.

Source: U.S. Bureau of Economic Analysis