US economic growth slowed in the final quarter last year but still expanded at a solid pace, driven by consumer spending that will likely keep Federal Reserve interest rate cuts on hold.
Gross domestic product, which measures economic activity, grew by 2.3 per cent in the months from October to December, the Commerce Department reported. GDP growth was measured at 3.1 per cent in the third quarter.
GDP grew by 2.8 per cent for 2024 overall, in line with the most recent projections. Fourth-quarter GDP growth was driven by consumer spending, which accounts for roughly two thirds of economic activity. Strong consumer spending came as the Fed reduced its benchmark interest rate target range by 100 basis points in the final three months of the year.
Stronger economic growth also means the Fed is likely on track to hold interest rates for at least the next few months.
Thursday's report comes a day after the US central bank left its target range unchanged at 4.25 to 4.5 per cent.
“With our policy stance significantly less restrictive than it had been, and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance,” Fed chairman Jerome Powell said, indicating the US central bank is content to keep rates steady for now.
Mr Powell also suggested the Federal Open Market Committee is not considering a rate cut in March.
“The broad sense of the committee … is that we don’t need to be in a hurry to adjust our policy stance,” he told reporters on Wednesday.
The Fed chairman said he is looking for “real progress” before reducing policy again and that the central bank does not want to see further weakening in the labour market.
What this progress looks like, he said, are “serial readings” that suggest inflation is moving back down to the Fed's 2 per cent target.
Traders anticipate the Fed will not cut rates again until June, according to CME Group data.
Progress in taming inflation stalled towards the end of 2024, but a softer-than-expected reading earlier this month lifted hopes that it could be moving down again.
The Fed's preferred inflation metric – the Personal Consumption Expenditures Price Index – rose at a 2.3 per cent annualised pace in the fourth quarter. Core PCE inflation, which strips food and energy, rose 2.5 per cent.
PCE inflation data for December is due to be released on Friday. Economists expect PCE inflation to have risen 0.3 per cent on a monthly basis in December and 2.6 per cent year-on-year, according to a FactSet estimate.
INDIA SQUADS
India squad for third Test against Sri Lanka
Virat Kohli (capt), Murali Vijay, Lokesh Rahul, Shikhar Dhawan, Cheteshwar Pujara, Ajinkya Rahane, Rohit Sharma, Wriddhiman Saha, Ravichandran Ashwin, Ravindra Jadeja, Kuldeep Yadav, Mohammed Shami, Umesh Yadav, Ishant Sharma, Vijay Shankar
India squad for ODI series against Sri Lanka
Rohit Sharma (capt), Shikhar Dhawan, Ajinkya Rahane, Shreyas Iyer, Manish Pandey, Kedar Jadhav, Dinesh Karthik, Mahendra Singh Dhoni, Hardik Pandya, Axar Patel, Kuldeep Yadav, Yuzvendra Chahal, Jasprit Bumrah, Bhuvneshwar Kumar, Siddarth Kaul
How to help
Call the hotline on 0502955999 or send "thenational" to the following numbers:
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Six pitfalls to avoid when trading company stocks
Following fashion
Investing is cyclical, buying last year's winners often means holding this year's losers.
Losing your balance
You end up with too much exposure to an individual company or sector that has taken your fancy.
Being over active
If you chop and change your portfolio too often, dealing charges will eat up your gains.
Running your losers
Investors hate admitting mistakes and hold onto bad stocks hoping they will come good.
Selling in a panic
If you sell up when the market drops, you have locked yourself out of the recovery.
Timing the market
Even the best investor in the world cannot consistently call market movements.
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Killing of Qassem Suleimani
More on Quran memorisation:
The specs
Engine: 3-litre twin-turbo V6
Power: 400hp
Torque: 475Nm
Transmission: 9-speed automatic
Price: From Dh215,900
On sale: Now
UAE currency: the story behind the money in your pockets
Cultural fiesta
What: The Al Burda Festival
When: November 14 (from 10am)
Where: Warehouse421, Abu Dhabi
The Al Burda Festival is a celebration of Islamic art and culture, featuring talks, performances and exhibitions. Organised by the Ministry of Culture and Knowledge Development, this one-day event opens with a session on the future of Islamic art. With this in mind, it is followed by a number of workshops and “masterclass” sessions in everything from calligraphy and typography to geometry and the origins of Islamic design. There will also be discussions on subjects including ‘Who is the Audience for Islamic Art?’ and ‘New Markets for Islamic Design.’ A live performance from Kuwaiti guitarist Yousif Yaseen should be one of the highlights of the day.
COMPANY%20PROFILE
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