US economy grows at 2.8% in Q3 2024

The pace of US economic growth slowed in the second reading for the third quarter of this year, due to declines in private inventory investment and residential fixed investment.

The US real gross domestic product (GDP) advanced at an annualized rate of 2.8% in Q3 2024, in line with the initial reading, and compared to a 3% uptick in the previous quarter, according to data by the Bureau of Economic Analysis (BEA) issued today, Nov. 27.

The quarterly pullback in the real GDP was driven by higher consumer spending, exports, and federal government spending, alongside lower private inventory and residential fixed investment.

The second reading included reviewing both private inventory investment, non-residential fixed investment, exports, and consumer spending data, in addition to revising import estimates downward — which are subtracted from GDP.

In current-US dollar terms, GDP rose by 4.7%, or $337.6 billion, to $29.35 trillion in Q3 2024, reflecting an upward revision of $4.4 billion from the previous estimate.

The price index for gross domestic purchases also jumped by 1.9%, up slightly from the earlier projection.

Meanwhile, the personal consumption expenditures (PCE) price index remained unadjusted at 1.5%, while its core counterpart, which excludes food and energy prices, was lowered 0.1% to amount to 2.1%.

PCE, in current-US dollar terms, gained $175.9 billion in the third quarter of this year, revised down by $45.3 billion from the initial reading.

Despite the weaker third-quarter GDP growth, the US economy maintained a growth rate above 2% for eight of the past nine quarters, reflecting the continued positive momentum despite the monetary tightening cycle.