GDP and the Economy

Advance Estimates for the Fourth Quarter of 2024

February 5, 2025

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Real gross domestic product (GDP) increased at an annual rate of 2.3 percent in the fourth quarter of 2024, according to the “advance” estimate of the National Income and Product Accounts (NIPAs) (chart 1 and table 1).¹ In the third quarter, real GDP increased 3.1 percent.

Real GDP increased 2.8 percent in 2024 (from the 2023 annual level to the 2024 annual level), compared with an increase of 2.9 percent in 2023 (see “Real GDP for 2024”).

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The increase in fourth-quarter real GDP primarily reflected increases in consumer spending, state and local government spending, residential fixed investment, and federal government spending that were partly offset by decreases in inventory investment and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased (chart 2 and table 1).²

• The increase in consumer spending reflected increases in both services and goods. Within services, the leading contributor to the increase was health care. Within goods, the leading contributors to the increase were recreational goods and vehicles and motor vehicles and parts.
• Within health care, hospital and nursing home services (notably, hospital services) and outpatient services increased.
• The increase in recreational goods and vehicles was led by information processing equipment.
• The increase in motor vehicles and parts was led by new light trucks.
• Within state and local government spending, the increase was led by compensation of employees.
• The increase in residential fixed investment reflected increases in brokers' commissions and improvements.
• Within federal government spending, the increase was led by defense consumption expenditures.
• The decrease in inventory investment was led by decreases in both the retail trade and wholesale trade industries.
• Within nonresidential fixed investment, the decrease was led by equipment. Within equipment, both transportation equipment and computers and peripheral equipment decreased.

Compared to the third quarter, the deceleration in real GDP in the fourth quarter primarily reflected downturns in exports and business investment and a larger decrease in inventory investment. Imports turned down.

The U.S. Bureau of Economic Analysis' (BEA's) featured measure of inflation for the U.S. economy, the price index for gross domestic purchases (goods and services purchased by U.S. residents), increased 2.2 percent in the fourth quarter after increasing 1.9 percent in the third quarter (table 2 and chart 3).

Within gross domestic purchases, food prices increased 2.1 percent in the fourth quarter after increasing 1.3 percent in the third quarter. Prices for energy goods and services decreased 2.9 percent after decreasing 12.6 percent. Excluding food and energy, gross domestic purchases prices increased 2.3 percent after increasing 2.4 percent.

The price index for personal consumption expenditures (PCE) increased 2.3 percent in the fourth quarter after increasing 1.5 percent in the third quarter. The increase in PCE prices reflected an increase in prices for services that was partly offset by a decrease in prices for goods.

• Within services, the leading contributors to the increase were housing and utilities (mainly housing), health care (led by hospitals), and financial services and insurance (mainly banking and other financial services).
• Within goods, the leading contributors to the decrease were recreational goods and vehicles (led by video, audio, photographic, and information processing equipment and media) and gasoline and other energy goods (mainly motor vehicle fuels, lubricants, and fluids).

Excluding food and energy, the “core” PCE price index increased 2.5 percent in the fourth quarter, following an increase of 2.2 percent in the third quarter.

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Table 2. Prices for Gross Domestic Purchases
[Percent change at annual rates; based on seasonally adjusted index numbers (2017=100)]

Line	Series	Change from preceding period (percent))				Contribution to percent change in gross domestic purchases prices (percentage points)
		2024
		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
1	Gross domestic purchases1	3.0	2.4	1.9	2.2	3.0	2.4	1.9	2.2
2	Personal consumption expenditures	3.4	2.5	1.5	2.3	2.25	1.67	1.02	1.49
3	Goods	−0.5	0.7	−1.6	−0.5	−0.10	0.15	−0.33	−0.09
4	Durable goods	−0.5	−2.6	−2.4	0.3	−0.03	−0.18	−0.17	0.03
5	Nondurable goods	−0.5	2.5	−1.2	−0.9	−0.07	0.33	−0.16	−0.12
6	Services	5.3	3.4	3.0	3.5	2.36	1.52	1.35	1.58
7	Gross private domestic investment	0.9	2.5	3.0	1.5	0.16	0.44	0.53	0.26
8	Fixed investment	0.9	2.6	3.2	1.5	0.16	0.45	0.55	0.26
9	Nonresidential	1.3	2.3	3.1	1.4	0.18	0.31	0.42	0.19
10	Structures	−2.0	0.3	1.9	−0.5	−0.06	0.01	0.06	−0.01
11	Equipment	3.8	1.7	2.5	0.3	0.19	0.08	0.12	0.02
12	Intellectual property products	1.0	4.0	4.4	3.5	0.06	0.21	0.23	0.19
13	Residential	−0.4	3.5	3.5	1.7	−0.02	0.14	0.13	0.06
14	Change in private inventories	---	---	---	---	0.00	−0.01	−0.02	0.01
15	Government consumption expenditures and gross investment	3.7	2.1	2.4	2.4	0.62	0.34	0.40	0.40
16	Federal	3.6	2.8	2.4	2.8	0.22	0.17	0.15	0.18
17	National defense	3.8	2.7	1.9	2.8	0.13	0.09	0.07	0.10
18	Nondefense	3.2	3.0	3.2	2.9	0.09	0.08	0.08	0.08
19	State and local	3.9	1.6	2.4	2.2	0.40	0.17	0.25	0.23
	Addenda:
	Gross domestic purchases:
20	Food	2.3	−0.5	1.3	2.1	0.12	−0.02	0.07	0.10
21	Energy goods and services	−1.3	2.5	−12.6	−2.9	−0.03	0.06	−0.34	−0.07
22	Excluding food and energy	3.2	2.6	2.4	2.3	2.95	2.41	2.22	2.13
	Personal consumption expenditures:
23	Food and beverages purchased for off-premises consumption	2.1	−0.4	1.6	2.1	---	---	---	---
24	Energy goods and services	−1.2	2.4	−12.4	−2.9	---	---	---	---
25	Excluding food and energy	3.7	2.8	2.2	2.5	---	---	---	---
26	Gross domestic product	3.0	2.5	1.9	2.2	---	---	---	---
27	Exports of goods and services	2.5	2.7	−0.9	0.2	---	---	---	---
28	Imports of goods and services	2.6	2.1	−0.2	0.3	---	---	---	---

1. The estimated prices for gross domestic purchases under the contribution columns are also percent changes.

Note. Most percent changes are from National Income and Product Accounts (NIPA) table 1.6.7; percent changes for personal consumption expenditures (PCE) for food and energy goods and services and for PCE excluding food and energy are from NIPA table 2.3.7. Contributions are from NIPA table 1.6.8. Gross domestic product, export, and import prices are from NIPA table 1.1.7.

U.S. Bureau of Economic Analysis

Note on Prices

Note on Prices

The U.S. Bureau of Economic Analysis' (BEA's) gross domestic purchases price index is the most comprehensive index of prices paid by U.S. residents for all goods and services, regardless of whether those goods and services were produced domestically or imported. It is derived from the prices of personal consumption expenditures (PCE), private investment, and government consumption expenditures and gross investment.

The gross domestic product (GDP) price index measures the prices of goods and services produced in the United States, including the prices of goods and services produced for export. The difference between the gross domestic purchases price index and the GDP price index reflects the differences between imports prices (included in the gross domestic purchases index) and exports prices (included in the GDP price index). For other measures that are affected by import and export prices, see the FAQ “How do the effects of dollar depreciation show up in the GDP accounts?” on BEA's website.

BEA also produces price indexes for all the components of GDP. The PCE price index is a measure of the total cost of consumer goods and services, including durable goods, nondurable goods, and services. PCE prices for food, for energy goods and services, and for all items except food and energy are also estimated and reported.

Because prices for food and for energy can be volatile, the price measure that excludes food and energy is often used as a measure of underlying, or “core,” inflation. The core PCE price index includes purchased meals and beverages, such as restaurant meals and pet food. (See “What is the core PCE price index?” on BEA's website.)

BEA also prepares a supplemental PCE price index, the “market-based” PCE price index, that is based on market transactions for which there are corresponding price measures. This index excludes many imputed expenditures, such as financial services furnished without payment, that are included in PCE and in the PCE price index. BEA also prepares a market-based measure that excludes food and energy.

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Measured in current dollars, personal income increased $319.6 billion in the fourth quarter, compared to an increase of $191.7 billion in the third quarter (table 3). The increase in the fourth quarter primarily reflected an increase in compensation (led by private wages and salaries).

Personal current taxes increased $44.9 billion in the fourth quarter after increasing $50.2 billion in the third quarter.

Current-dollar disposable personal income (DPI)—personal income less personal current taxes—increased $274.6 billion in the fourth quarter after increasing $141.5 billion in the third quarter. Real DPI (chart 4), which is deflated by the implicit price deflator for consumer spending, increased 2.8 after increasing 1.1 percent. Personal outlays—the sum of PCE, personal interest payments, and personal current transfer payments—increased $314.8 billion after increasing $266.1 billion. The personal saving rate (chart 5)—personal saving as a percentage of DPI—was 4.1 percent in the fourth quarter, compared with 4.3 percent in the third quarter.

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Real GDP increased 2.8 percent in 2024 (from the 2023 annual level to the 2024 annual level), compared with an increase of 2.9 percent in 2023. The increase in real GDP in 2024 reflected increases in consumer spending, nonresidenial fixed investment, state and local government spending, and exports. Imports increased (table 4 and chart 6).

• The increase in consumer spending reflected increases in both services and goods. Within services, the leading contributor to the increase was health care (both outpatient services and hospital and nursing home services). Within goods, the leading contributors were “other nondurable goods” (led by pharmaceuticals) and recreational goods and vehicles (led by information processing equipment).
• Within nonresidential fixed investment, the increase was led by intellectual property products (mainly software) and equipment (both information processing equipment and transportation equipment).
• Within state and local government spending, the increase was led by compensation of employees.
• Within exports, both services and goods increased. The increase in services was led by an increase in travel and “other business services.” The increase in goods was led by capital goods, except automotive.

The price index for gross domestic purchases increased 2.3 percent in 2024, compared with an increase of 3.3 percent in 2023. The PCE price index increased 2.5 percent, compared with an increase of 3.8 percent. Excluding food and energy prices, the PCE price index increased 2.8 percent, compared with an increase of 4.1 percent.

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Table 4. Real GDP and Related Measures, Annual
[Seasonally adjusted at annual rates]

Line	Series	Share of current-dollar GDP (percent)	Change from preceding period (percent)		Contribution to percent change in real GDP (percentage points)
		2024	2023	2024	2023	2024
1	GDP 1	100.0	2.9	2.8	2.9	2.8
2	Personal consumption expenditures	67.9	2.5	2.8	1.72	1.87
3	Goods	21.4	1.9	2.4	0.42	0.52
4	Durable goods	7.4	3.9	3.3	0.31	0.24
5	Nondurable goods	14.0	0.8	1.9	0.12	0.28
6	Services	46.5	2.9	2.9	1.30	1.35
7	Gross private domestic investment	18.1	0.1	4.0	0.02	0.73
8	Fixed investment	17.9	2.4	3.8	0.43	0.67
9	Nonresidential	13.8	6.0	3.7	0.81	0.50
10	Structures	3.1	10.8	3.2	0.32	0.10
11	Equipment	5.2	3.5	3.4	0.18	0.18
12	Intellectual property products	5.5	5.8	4.1	0.31	0.22
13	Residential	4.1	−8.3	4.2	−0.37	0.17
14	Change in private inventories	0.2	---	---	−0.41	0.06
15	Net exports of goods and services	−3.1	---	---	0.49	−0.39
16	Exports	10.9	2.8	3.2	0.31	0.35
17	Goods	7.1	2.3	2.2	0.17	0.16
18	Services	3.8	3.8	5.3	0.14	0.20
19	Imports	14.0	−1.2	5.4	0.17	−0.74
20	Goods	11.2	−1.8	4.9	0.22	−0.54
21	Services	2.8	1.6	7.5	−0.05	−0.20
22	Government consumption expenditures and gross investment	17.1	3.9	3.4	0.66	0.57
23	Federal	6.4	2.9	2.5	0.19	0.16
24	National defense	3.7	3.2	3.0	0.12	0.11
25	Nondefense	2.7	2.5	1.8	0.07	0.05
26	State and local	10.7	4.4	3.9	0.47	0.41
	Addenda:
27	Gross domestic income (GDI)2	---	1.7	---	---	---
28	Average of GDP and GDI	---	2.3	---	---	---

GDP

Gross domestic product

1. The GDP estimates under the contribution columns are also percent changes.
2. GDI is deflated by the implicit price deflator for GDP.  Not estimated with the Q4 advance or second estimates.

Note. Percent changes are from National Income and Product Account “NIPA” table 1.1.1, contributions to percent change are from NIPA table 1.1.2, and shares are from NIPA table 1.1.10.

U.S. Bureau of Economic Analysis

Information on Key Source Data, Assumptions, and Methodologies

Information on Key Source Data, Assumptions, and Methodologies

A comprehensive table that presents the “Key Source Data and Assumptions” (under Current Release) that are used to prepare each vintage of the estimate of GDP for the current quarter is available on BEA's website. For the advance estimates that are released near the end of the month after the close of the quarter, the table shows the months of source data for the quarter that are available; for most components of GDP, 3 months of data are available. For the components for which only 2 months of source data are available, BEA's assumptions for the third month are shown. Second estimates are released near the end of the second month after the close of the quarter, and third estimates are released near the end of the third month after the close of the quarter. With each vintage, the table is updated to add newly available and revised source data that have been incorporated into the estimates.

For additional details about the source data and the methodologies that are used to prepare the estimates, see “Concepts and Methods of the U.S. National Income and Product Accounts” on BEA's website.

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