The U.S. economy likely grew at an annual rate of 2.5% in the fourth quarter, according to forecasts.
- This is slower than the 3.1% growth seen in Q3.
- It would be the slowest pace since Q1 2024, when GDP grew 1.6%.
- Despite the slowdown, experts say the economy remained on solid footing.
A report from the Bureau of Economic Analysis on Thursday will confirm the final numbers.
Markets May Focus on Trump’s Policies Instead
Economists believe investors will pay more attention to new White House policies rather than past GDP numbers.
- John Ryding and Conrad DeQuadros from Brean Capital Markets say GDP is a backward-looking indicator.
- Markets are watching Trump’s plans for tariffs, taxes, and trade policies.
- The report will still provide a starting point for economic growth in 2025.
Trade Deficit Could Push GDP Lower
A separate Commerce Department report on Wednesday showed a record-high trade deficit.
- Businesses rushed to import goods before Trump’s expected tariffs.
- Because imports subtract from GDP, the final number could be lower than 2.5%.
- Some economists say GDP could fall to around 1% instead.
Housing Investment May Offset Business Slowdown
Economists at Goldman Sachs believe that housing investment rebounded in Q4.
- This could help balance out declines in business investment.
- Consumer spending and job growth remain strong, supporting the economy.
GDP Numbers Will Be Revised
The figures released Thursday are just the first estimate.
- GDP data will be revised twice before becoming final.
- As more economic data comes in, the growth rate could be adjusted up or down.
The report will provide important clues about the strength of the economy heading into 2025.
