US GDP Grew by 2.3 Percent in 4th Quarter

Overall 2024 GDP growth was at 2.8 percent, a lower growth rate compared with 2023.

Workers weld a chassis at a factory in Riverside, Calif., on Sept. 23, 2005. David McNew/Getty Images

The U.S. economy registered growth in the fourth quarter of 2024, but the pace had decelerated amid a decline in exports and investments, according to the second GDP estimate released by the U.S. Bureau of Economic Analysis (BEA).

GDP increased at an annual rate of 2.3 percent in the fourth quarter of 2024, the agency said in a Feb. 27 statement. This is lower than the 3.1 percent GDP growth seen in the third quarter and is the lowest growth level of the past three quarters.

“Compared to the third quarter, the deceleration in real GDP in the fourth quarter primarily reflected downturns in investment and exports,” the agency stated. It added that this was “partly offset by an acceleration in consumer spending.”

The second estimate of 2.3 percent growth is the same as the advanced estimate BEA released in late January.

At the time, Jamie Cox, managing partner at Harris Financial Group, told The Epoch Times that while “headline growth appeared weak,” consumers were “powering forward in a big way.” He predicted that the U.S. economy is likely to outpace the rest of the world.

According to recent BEA data, the overall GDP growth for 2024 was pegged at 2.8 percent, a slight decline from the 2.9 percent growth in 2023.

A Feb. 25 report from consulting company Deloitte predicted that the U.S. economy will remain strong moving forward while potentially experiencing some growth deceleration.

“Consumer spending will probably grow more slowly, especially given the relatively high delinquency rate on credit card debt,” the report states. “Moreover, households have probably exhausted the excess savings they accumulated during the pandemic. In addition, there is a potential downside if significant tariffs are introduced.

“This could lead to increases in consumer prices that could undermine household purchasing power and weaken demand. Moreover, retaliatory tariffs from other countries could undermine U.S. export growth.”

On the other side, less intrusive regulation and tax cuts may have a positive effect on business investments in the United States, according to the report.

Tariffs and GDP

There are concerns about the effect of President Donald Trump’s tariffs on the United States’ GDP growth. On Feb. 4, the Trump administration imposed 10 percent tariffs on imports from China as well as 25 percent tariffs on Mexican and Canadian imports, with the president citing “major threat of illegal aliens and deadly drugs killing [U.S.] citizens, including fentanyl.”

“[Tariffs are] necessary to hold China, Mexico, and Canada accountable for their promises to halt the flood of poisonous drugs into the United States,” the White House stated at the time.

The Canadian and Mexican tariffs were paused for a month. Trump recently said his administration will go ahead with the charges on March 4.

Meanwhile, the president recently announced an additional 10 percent tariff on Chinese imports, over and above the 10 percent charged earlier in February. The new tariff is expected to come into effect on March 4.

The Trump administration also plans to impose a 25 percent tariff on imports from the European Union.

According to an estimate by S&P Global, if the tariffs on Mexico and Canada were implemented and these tariffs remained in place through 2025, the U.S. GDP, over a 12-month period, could be 0.6 percent lower than projected.

A Feb. 27 post from the Kiel Institute for the World Economy warned that an imposition of 25 percent tariffs on European goods could have “significant economic repercussions” for both parties.

“These tariffs would not only strain transatlantic economic relations but also drive up costs for U.S. consumers and manufacturers,” Julian Hinz, research director for trade policy at the institute, said.

“The significant increase in production costs due to higher-priced imported inputs could undermine U.S. competitiveness and fuel inflation, ultimately harming American businesses and consumers alike.”

In an interview with The Epoch Times, former Commerce Secretary Wilbur Ross said he sees the odds of an immense trade conflict as too low, with the advantage firmly on the United States’ side.

Ross said other nations cannot afford a trade war with the United States. He pointed to Mexico and Canada, which have economies only a fraction of the size of the U.S. economy.

“That means $1 of pain that we inflict on them is something like 10 times as damaging to their economy,” he said. “It would be extremely destructive of their economies and much less destructive of ours.

“I have some optimism that even though there would be a fair amount of turmoil in the beginning, it’s quite possible that the ultimate effect would be much closer to free trading than we would ever [have] otherwise.”

Meanwhile, automakers such as General Motors and Nissan are considering moving manufacturing back to the United States if tariffs are imposed. This could pave the way to promoting local jobs and boosting the regional economy.

Andrew Moran contributed to this report.