US GDP Growth Upwardly Revised In Q4, Trade Deficit Slightly Narrows As Auto Exports Soar In February

Economic data released Thursday morning showed a marginal upward revision to U.S. gross domestic product growth for the fourth quarter of 2024, alongside a narrower but still historically high goods trade deficit for February.

The Bureau of Economic Analysis reported that the U.S. economy expanded at an annualized rate of 2.4% in the fourth quarter of 2024, up from the previously estimated 2.3%.

While this marks a slight improvement, it also reflects a slowdown from the 3.1% growth rate recorded in the third quarter.

“The increase in real GDP in the fourth quarter primarily reflected increases in consumer spending and government spending that were partly offset by a decrease in investment. Imports, which are a subtraction in the calculation of GDP, decreased,” the statement said.

The key industry contributors to economic growth during the quarter included:

• Real estate and rental and leasing, adding 0.38 percentage points to GDP
• Professional, scientific, and technical services, contributing 0.37 percentage points
• Health care and social assistance, accounting for 0.34 percentage points

On the downside, durable goods manufacturing and wholesale trade subtracted 0.05 percentage points each from the headline figure.

Inflation metrics remained relatively stable. The price index for gross domestic purchases increased by 2.2%, revised down 0.1 percentage point. The Personal Consumption Expenditure price index, a key inflation gauge, rose 2.4%, unchanged from the prior estimate.

The core PCE, which excludes volatile food and energy prices and is closely monitored by the Federal Reserve, rose 2.6%, slightly lower than the previously estimated 2.7%.

Trade Deficit Shrinks Less Than Expected, Auto Exports Rocket Ahead Of Tariffs

In a separate report, the U.S. Census Bureau noted that the goods trade deficit narrowed to $147.9 billion in February from a record-high $155.6 billion in January.

The slight improvement fell short of economist expectations, which had forecast a much narrower gap of $134.5 billion.

The data suggests that trade front-loading ahead of potential tariff increases may have persisted during the month.

February exports totaled $178.6 billion, an increase of $7.0 billion from January. Imports eased slightly to $326.5 billion, down $0.6 billion.

Notable export movements in February included a sharp 12.7% increase in automotive vehicles, which rose to $14.22 billion on a seasonally-adjusted basis.

Capital goods exports climbed by 4.8%, while consumer goods advanced 2.8% over the month.

On the import side, automotive vehicles rose 1.2%, consumer goods increased 2.8%, and the “other goods” category posted a strong 6.1% monthly gain.

U.S. Goods Trade Balance – February 2025

Category	Exports (Feb)	M/M % Change	Imports (Feb)	M/M % Change
Foods, Feeds & Beverages	13.04	+4.1%	19.61	-5.4%
Industrial Supplies	62.37	-2.9%	85.99	-0.2%
Capital Goods	59.34	+4.9%	89.26	-2.1%
Automotive Vehicles, etc.	14.22	+12.7%	38.43	+1.2%
Consumer Goods	22.11	+2.8%	80.51	+2.8%
Other Goods	7.52	+6.1%	12.71	+6.1%
Total	178.60	+4.1%	326.51	-0.2%

Labor Market Remains Steady

Labor market data showed little deviation from expectations.

According to the Labor Department, initial jobless claims came in at 224,000 for the week, closely aligned with forecasts and the prior week’s 225,000.

Continuing jobless claims dropped to 1.856 million, outperforming projections of a slight rise to 1.89 million and improving from the previous 1.881 million, signaling resilience in the employment landscape.

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