‘The Claman Countdown’ panelists Jonathan Corpina and Ashish Shah unpacked the cause of market volatility and discussed the decision of the Federal Reserve to leave the decision unchanged.
According to the new data released on Thursday, the US economy slowed down more than expected in the fourth quarter.
Bureau of Economic Analysis (BEA) of Commerce Department released its advance estimate for the fourth quarter GDP (GDP), which found American economy increased The fourth quarter at an annual rate of 2.3%, which runs from October to December.
Economists surveyed by LSEG expected the economy to grow at a rate of 2.6% in this quarter. 2.3% growth of the fourth quarter was slower than 3.1% GDP hike recorded in the third quarter.
GDP growth Mainly the consumer and government spending was motivated by an increase, but was partially offset by a decrease in investment.
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consumer spending The fourth quarter increased by 4.2%, with an increase in both services and goods. It was 3.7% in the third quarter and above 2.8% in the second quarter. Government expenditure The fourth quarter was 2.5% above 2.5% – which was slower by an increase of 5.1% in the third quarter.
Trade investment The fourth quarter declined by 5.6% in the fourth quarter compared to the third quarter, which was relatively flat at 0.8%. Investment in equipment declined by 7.8% while the investment in structures decreased by 2.2% – which was partially offset by an increase of 5.3% in residential investment and 2.6% increase in intellectual property products.
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Consumer spending helped to increase GDP growth in the fourth quarter. (Matthew Hatcher / Bloomberg Getty Embolce / Getty Image)
Disposable individual income increased by 2.8% – acceleration from 1% and 1.1% in the second and third quarters respectively.
personal savings The fourth quarter was $ 896 billion, below $ 936 billion in the earlier quarter. Personal savings as a percentage of disposable personal income were 4.1% in the fourth quarter.
The BE report also included an estimate for the actual GDP for 2024, which came as an increase of 2.8% from the 2.9% increase in 2023.
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Trade investment slowed down in the fourth quarter. (Through Andrew Magnum / Bloomberg Getty Image / Getty Image)
Ellen Zentner, chief economic strategist of Morgan Stanley Wealth Management, said, “The fourth quarter GDP shut down a surprisingly strong year in 2024.” “American consumer has been invincible, supported by money creation, a strong labor market, and borrowing. Nevertheless, inflation is very high for the choice of fed and the bar is growing for a march rate cut.”
federal Reserve In September, November and December, the interest rates were stabilized after three consecutive rate cuts on inflation after three consecutive rate cuts in September and December.
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The next meeting of the Central Bank has been scheduled for the march and the possibility of constant stagnation in the form of increase in the market has been observed.
According to the CME Fedwatch Tool, the possibility of the remaining rates on the current target limit increased from 77.2% to 82% on Wednesday till Thursday morning.
