U.S. economy grows solid 2.3% from October to December, 2.8% for full year 2024

WASHINGTON (AP) — The American economy ended 2024 on a solid note with consumer spending continuing to drive growth.

The Commerce Department reported Thursday that gross domestic product — the economy's output of goods and services — expanded at a 2.3% annual rate from October through December.

For the full year, the economy grew a healthy 2.8%, compared with 2.9% in 2023.

The fourth-quarter growth was a tick below the 2.4% economists had expected, according to a survey of forecasters by the data firm FactSet.

Consumer spending grew at a 4.2% pace, fastest since January-March 2023 and up from 3.7% in July-September last year. But business investment tumbled as investment in equipment plunged after two straight strong quarters.

President Donald Trump has inherited a healthy economy. Growth has been steady and unemployment low — 4.1% in December.

On Wednesday, the Federal Reserve left its benchmark interest rate unchanged after making three cuts since September. With the economy rolling along, Fed Chair Jerome Powell told reporters, "we do not need to be in a hurry'' to make more cuts. The Fed is also cautious because progress against inflation has stalled in recent months after falling from four-decade highs hit in mid-2022.

The European Central Bank cut its benchmark rate by a quarter point Thursday, underlining the contrast between more robust growth in the U.S. economy and stagnation in Europe, which recorded zero growth at the end of last year.

The U.S. economic outlook has become more cloudy, however. Trump has promised to cut taxes and ease regulations on business, which could speed GDP growth. But his plan to impose big taxes on imports and to deport millions of immigrants working in the United States illegally could mean slower growth and higher prices.