U.S. Economic system Soars with 2.8% Progress in Q3 2024, Preliminary Information Reveals

The U.S. financial system expanded at an annualized fee of two.8% within the third quarter of 2024 in preliminary information, barely easing from the three.0% progress recorded within the second quarter. Over the previous six months, actual GDP has grown by a median of two.9%, highlighting the financial system’s continued resilience, notably in shopper spending.

For the total yr, projections recommend actual GDP progress will common 2.8%, intently aligning with the two.9% fee achieved in 2023. Whereas some financial softening is predicted subsequent yr, forecasts anticipate the U.S. financial system will nonetheless develop by 2.3% in 2025.

The underlying information for Q3 2024 offered a combined image. On the optimistic facet, shopper spending remained a key driver, climbing 3.7% at an annualized fee, boosted by a rebound in items purchases. Companies spending additionally superior, rising 2.6% for the quarter.

Private consumption expenditures, encompassing each items and companies, contributed 2.46 share factors to general progress. Notably, foodservices and lodging, which had beforehand weighed on progress within the first two quarters of this yr, added 0.19 share factors to Q3 GDP—a welcome turnaround.

Nonresidential mounted funding softened to three.3% progress however nonetheless expanded reasonably, supported by positive factors in gear spending. Nevertheless, funding in new nonresidential constructions declined for the primary time since This autumn 2021, and residential spending remained weak for the second consecutive quarter, reflecting challenges within the housing market. Enterprise stock funding, which had surged in Q2, slowed considerably in Q3, leading to a negligible 0.07 share level contribution from general enterprise funding, together with each mounted investments and inventories.

Authorities spending remained a vibrant spot, rising 5.0% at an annual fee and including 0.85 share factors to GDP progress. Nevertheless, commerce dynamics weighed on progress, as imports outpaced exports, notably in companies, with web exports subtracting 0.56 share factors from headline progress. Internet exports have now acted as a drag on U.S. financial efficiency in 5 of the final six quarters.  
 

This text initially appeared on Nationwide Restaurant Affiliation.