Economic growth came in pretty strong for the fourth quarter of 2024. As we learned on Thursday, GDP rose at an annual rate of 2.3%.

And consumer spending is a key contributor. It rose 4.2% for the quarter. Spending on durable goods — items designed to last, like cars, TVs and washing machines — was up 12%, the biggest quarterly jump since early 2023. 

At the end of last year, with business investment flagging, Ben Ayers at Nationwide Insurance said that U.S. consumers were the main engine of economic growth.

He said they’re spending on the strength of healthy job growth and wage gains. High earners are contributing the most — buoyed by gains on stock and home prices — but, “we are more concerned about the lower end of the income spectrum,” said Ayers. “They’re putting more of their expenses on credit cards, they’re piling up debt, they’re running out of savings.”

Severe storms in the Southeast last fall also led to a spike in spending on cars, appliances, and building materials, said Mark Hamrick at Bankrate.

“This is not an endorsement of the capability of consumers, when people are having to spend in reaction to a natural disaster, it’s just — it’s part of the world we live in now,” said Hamrick.

All that “replacement spending” represents personal tragedy and loss. But it contributes to GDP.