Economy Slowed in 4Q: 2024 Despite Strong Consumer Spending

Despite resilient consumer spending and record-high household net worth, the U.S. economy showed signs of cooling in the final quarter of 2024. Real GDP growth slowed to 2.3%, down from 3.1% the previous quarter, as business investment weakened and inventory restocking declined. Elevated mortgage rates and fading wage momentum may further temper consumption in 2025. Although job growth and real income gains drove spending last year, forecasts suggest this pace is unlikely to continue.