US economic activity looks set to post softer growth in the government’s upcoming fourth-quarter GDP report. Based on the median nowcast from several sources, output appears set to downshift to the slowest increase since 2024’s first quarter.

GDP for Q4 is projected to rise 2.1% (real annualized rate), based on the median estimate. If accurate, the rise will mark a substantial downshift from Q3’s strong 3.1% increase and will be the softest advance since Q1:2024’s sluggish 1.6%. The Bureau of Economic Analysis is scheduled to publish 2024’s preliminary Q4 data on Jan. 30.

The good news is that today’s 2.1% median nowcast is unchanged from the previous estimate published on Dec. 17. The recent stability in the median estimate at this late date for Q4 analysis offers a degree of confidence for expecting growth in the 2% range. Note, howevver, that a 2% increase is moderately below the 2.7% average for data published over the past four quarters through Q4:2024.

By some accounts, there’s room for stronger estimates. Using the latest PMI survey data suggests US economic output rose 3%-plus.  “The US economy ended 2024 on a high according to the latest business surveys,” says Chris Williamson, chief business economist at S&P Global Market Intelligence. “Business activity in the vast services economy surged higher in the closing month of 2024 on fuller order books and rising optimism about prospects for the year ahead.”