US Economy Grows at a Solid 2.8% Pace in 2024

The U.S. economy registered solid though slightly disappointing growth in the final three months of the Biden administration, as gross domestic product expanded at a 2.3% annual rate, according to the Commerce Department. The results were slightly below expectations ranging from 2.4% to 2.6%.

For the full year, the economy grew at a healthy 2.8% rate, just below the 2.9% rate recorded in 2023. Measured from the fourth quarter of 2023 to the fourth quarter of 2024, the growth rate was 2.5%.

Consumer spending was a key driver last quarter, growing at a 4.2% pace, up from 3.7% the quarter before. Government spending rose, as well, growing 2.5%. Fixed investment, however, was a drag during the quarter, falling by 5.6%. 

The report boosts confidence about the state of the economy. “Today’s GDP report confirms that the U.S. economic expansion continued apace into the end of 2024 on relatively firm footing,” said Mike Reynolds, vice president of investment strategy at Glenmede, per CNBC. “As goes the consumer, so goes the broader economy in the U.S., and household spending put in an exceptionally strong showing in Q4.”

Looking ahead, analysts said the U.S. economy is poised for continued growth. “We expect growth this year to expand at a 2.5% pace with risk of a quicker pace of expansion—above 3%—as the economy continues to outperform its global peers,” wrote RSM Chief Economist Joseph Brusuelas.

Some analysts, however, warned that potential new policies being discussed by the Trump administration could change the trajectory in significant ways. “The biggest risk to our 2025 forecast is an immediate imposition of across-the-board tariffs on key trading partners,” said Oxford Economics economist Bernard Yaros, per Semafor.