The U.S. GDP growth for the third quarter of 2024 was reported at 2.8%, which fell short of market expectations of around 3.0%. This slower-than-anticipated growth reflects challenges in key sectors, including a downturn in the housing market and a slight decrease in consumer spending. The impact of rising interest rates and inflationary pressures has been significant, cooling down areas that previously drove growth. This slower growth rate is likely to factor into the Federal Reserve’s considerations for future rate adjustments, especially as it balances inflation control with the need to support economic activity .
Analysts suggest that a softer-than-expected GDP could signal to the Fed that its rate hikes are curbing growth, potentially leading to a pause in additional rate increases. However, the labor market’s strength and other economic indicators will also influence the Fed’s decision-making in the coming months .
