(Kitco News) - The U.S. economy showed unexpected weakness to close 2024 as growth increased less than expected between October and December.
The Bureau of Economic Analysis announced the advance reading of the fourth-quarter Gross Domestic Product on Thursday, saying the economy grew 2.3% in the last three months of 2024, down from 3.1% in the third quarter. The data was significantly worse than economists' expectations, as consensus forecasts were looking for a growth rate of 2.8%.
“The increase in real GDP in the fourth quarter primarily reflected increases in consumer spending and government spending that were partly offset by a decrease in investment. Imports, which are a subtraction in the calculation of GDP, decreased,” the report said. “Compared to the third quarter, the deceleration in real GDP in the fourth quarter primarily reflected downturns in investment and exports.”
The gold market was trading near session highs prior to the 8:30 a.m. EST release, and the yellow metal maintained its elevated levels in the minutes afterward. Spot gold last traded at $2,779.31 per ounce for a gain of 0.70% on the session.
Looking at some of the components of the report, consumer spending rose 4.2% in the fourth quarter after increasing 3.7% in Q3 and compared to economists’ 2.9% expectation.
The report also noted that inflation ticked slightly higher. The advance Core Personal Consumption Expenditures (PCE) Index for Q4 rose 2.5%, in line with economists’ expectations, and the advance GDP Price Index increased 2.2% quarter over quarter against expectations of a 2.5% reading.
