US economy in good health

The US economy advanced at a healthy pace and inflation was more stubborn than initially estimated at the end of 2024.

Gross domestic product increased at an unrevised 2.3 percent annualized pace in the fourth quarter, according to the Bureau of Economic Analysis out yesterday. The primary growth engine - consumer spending - advanced at a 4.2 percent pace.

The Federal Reserve's preferred metric - the personal consumption expenditures price index excluding food and energy - climbed 2.7 percent, faster than the 2.5 percent initially reported.

The January PCE report, due today, is currently projected to show the core metric rose 2.6 percent from a year ago.

The report showcases an economy that continued to expand at a solid pace on the shoulders of resilient consumer spending. While elevated interest rates and a higher cost of living are taking a toll on lower-income households, many Americans are benefiting from pay growth and hiring.

Bloomberg