Economy Statement for the Treasury Borrowing Advisory Committee

IntroductionRecent data indicate that U.S. economic growth slowed in the final quarter of 2024—reflecting in part the impacts of consecutive hurricanes in October as well as labor strikes. Fourth-quarter data also suggest that labor markets have largely returned to balance, but headline and core inflation both ticked up. Further moderation is needed before inflation is sustainably consistent with the Federal Reserve’s target.Real Gross Domestic Product (GDP)Real GDP growth slowed to 2.3 percent at an annual rate in the fourth quarter from the third quarter’s 3.1 percent pace. Slower growth reflected a large drag from the change in private inventories, a volatile component. By contrast, private consumption growth increased, and residential investment as well as government spending contributed to the quarterly expansion.