U.S. GDP Slows Down to 2.3% While Investments Decreased in Q4 2024

Discover its impact on traditional markets and the crypto industry.

• The U.S. GDP rates dropped in Q4 compared to that of Q3, hinting toward a drop in the economic health of the country
• This could inversely impact the crypto markets, which are at the foothill of a massive  explosion and waiting for a bullish confirmation

In a recent update, the Bureau of Economic Analysis produced the Gross Domestic Product or GDP. According to the newly released data, the real gross domestic product (GDP) has increased at an annual rate of 2.3% in the fourth quarter of 2024 compared to 3.1% in the third quarter. The increase in the real GDP hints at an increase in both consumer and government spending.

Despite a rise in the rates, the impact was neutralized by a drop in decrease in investment. Besides, the imports which are not considered in calculating the GDP have also decreased compared to the third quarter. This decline in the rates hints towards a downturn in investments and imports & exports.

On the other hand, the price index of gross domestic purchases increased 2.2% in Q4 compared to 1.0% in Q3. Besides, the personal consumption expenditures (PCE) price index surged to 2.3% compared to 1.5% in Q3. Additionally, the annual rates also remain slightly decreased from 2.9% in 2023 to 2.8% in 2024.

The 2024 GDP levels have marginally dropped compared to that of 2023, which may not directly hint towards a drop in the economy. Multiple factors suggest a positive outlook for the U.S. GDP in 2025, which includes lower unemployment, a low debt-to-income ratio, low debt delinquencies, and solid consumption. Therefore, the IMF believes the rates may soar to 2.7% in 2025. making the U.S., the fastest-growing economy.

Source: BEA.gov