The American economy increased at a slower than expected pace in the fourth quarter.
The Bureau of Economic Analysis Estitition of American gross domestic product in the fourth quarter (GDP)) have shown that the economy increased at an annualized rate of 2.3% during the period, below the growth of 2.6% expected by the economists interviewed by Bloomberg. Reading occurred lower than the 3.1% growth observed in the third quarter.
The increase in consumer spending and public spending resulted in economic growth during the quarter, while the decrease in investments compensates for certain gains. For the year, the US economy increased to 2.8%, slightly lower than 2.9% observed in 2023, but above the 2.5% growth observed in 2022.
Meanwhile, the “basic” personal consumption expenditure index, which excludes the volatile food and energy categories, increased by 2.5% in the fourth quarter, in accordance with estimates and higher than 2.2% observed in the previous quarter.
The data press release comes as investors try to assess whether the federal reserve will start to reduce interest rates again in 2025 after having kept them stable on Wednesday. Powell said at a press conference that the economy “remains strong” while inflation “remains somewhat high”.
“We do not need to be in a hurry to adjust our political position,” said the president of the Fed Powell.
After the Fed meeting on Wednesday, the markets see less than 50% chance that the Fed reduces rates before its June meeting, According to the CME Fedwatch tool.
This is a news. More to come …
Josh Schafer is Yahoo Finance journalist. Follow him on x @_joshschafer.
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