U.S. economic growth likely slowed in the fourth quarter due to a rise in imports and a Boeing strike that affected aircraft spending. However, strong domestic demand, especially from consumer spending driven by a healthy job market and good wage growth, should keep the Federal Reserve from making major interest rate cuts this year.
The GDP report, expected to be released Thursday, will show consumer spending remained strong last quarter. Despite this, the Atlanta Fed reduced its GDP forecast for the quarter from 3.2% to 2.3%, partly due to a record high in the goods trade deficit in December. Full-year growth for 2024 is projected at 2.8%, following 2.9% growth in 2023. This growth is higher than the 1.8% rate that the Federal Reserve considers non-inflationary.
On Wednesday, U.S. Federal Reserve has kept the interest rate steady at 4.50%, in line with expectations and the previous rate.
