Americans saw an economic future with the election of Trump.  The American economy grew at a solid 2.3% annual rate the last three months of 2024, supported by a burst of year-end consumer spending, the government said, leaving unchanged its initial estimate of fourth-quarter growth.

     The outlook for 2025 is cloudier as President Donald Trump pursues trade wars, cutbacks in the federal workforce and mass deportations.  The Commerce Department reported Thursday that growth in gross domestic product — the nation’s output of goods and services — decelerated from a 3.1% pace in July-September 2024.  For all of last year, the economy grew 2.8%, compared with 2.9% in 2023.  Consumer spending advanced at a 4.2% pace from October through December. Business investment fell in the fourth quarter, pushed lower by a 9% drop in equipment spending. A drop in business inventories shaved 0.81 percentage points off October-December growth.

     But a category within the GDP data that measures the economy’s underlying strength rose at a healthy 3% annual rate from July through September, slipping from 3.4% in the third quarter and down slightly from the government’s initial estimate. This category includes consumer spending and private investment but excludes volatile items like exports, inventories and government spending.

     Areport also showed that inflationary pressure persists in the economy. The Federal Reserve’s favored inflation gauge - called the personal consumption expenditures index, or PCE - rose at a 2.4% annual pace last quarter, up from 1.5% in the third quarter and above the Fed’s 2% target. Excluding volatile food and energy prices, so-called core PCE inflation was 2.7%, up from 2.2% in the July-September quarter. Both those inflation numbers were slightly higher than they’d been in the Commerce Department’s initial report.