Economic growth in the United States decelerated towards the end of last year, as reported by the US Commerce Department. The economy expanded at an annual rate of 2.3% between October and December, down from 3.1% in the preceding quarter. The decline came amidst unexpected sharp drops in trade, alongside natural disasters and labor strikes affecting economic activity.
President Donald Trump is seeking a significant overhaul of the nation's economic policies to address these challenges. This includes a strategy to introduce higher tariffs on imports, with the first set potentially being announced this week. These measures aim to bolster domestic growth and mitigate external economic pressures.
The US was hit by hurricanes and labor strikes during this period, contributing to the slower than anticipated growth rate. Analysts had forecast the economy to expand at 2.5% in the final quarter of 2024, highlighting that while growth was slower than expected, it remained solid. Details from the Commerce Department report suggest underlying strength in other sectors which could provide a foundation for future growth.
The sharper than expected decline in trade played a crucial role in the slowdown. This downturn, alongside the impact of natural disasters and labor disruptions, created headwinds for economic expansion, as noted by economic analysts.
President Trump's administration is focusing on recalibrating economic strategies to counteract these challenges. The proposed tariff increases are part of a broader effort to protect domestic industries and encourage growth from within. The effectiveness of these new policies will be closely monitored as they roll out.