The U.S. Education Department said on Thursday it launched a portal called "End DEI" where the public can complain about diversity, equity, and inclusion initiatives in publicly-funded K-12 schools.
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The American economy grew at a solid 2.3% annual rate in the last three months of 2024, supported by a burst of year-end consumer spending, the government said, leaving unchanged its initial estimate of fourth-quarter growth.
The outlook for 2025 is cloudier as President Donald Trump pursues trade wars, cutbacks in the federal workforce, and mass deportations.
The Commerce Department reported Thursday that growth in gross domestic product — the nation’s output of goods and services — decelerated from a 3.1% pace in July to September 2024.
For all of last year, the economy grew 2.8%, compared with 2.9% in 2023.
Consumer spending advanced at a 4.2% pace from October through December. Business investment fell in the fourth quarter, pushed lower by a 9% drop in equipment spending. A drop in business inventories shaved 0.81 percentage points off October-December growth.
However, a category within the GDP data that measures the economy’s underlying strength rose at a healthy 3% annual rate from July through September, slipping from 3.4% in the third quarter and down slightly from the government’s initial estimate. This category includes consumer spending and private investment but excludes volatile items like exports, inventories, and government spending.
Wednesday’s report also showed that inflationary pressure persists in the economy. The Federal Reserve’s favored inflation gauge — called the personal consumption expenditures index, or PCE — rose at a 2.4% annual pace last quarter, up from 1.5% in the third quarter and above the Fed’s 2% target. Excluding volatile food and energy prices, so-called core PCE inflation was 2.7%, up from 2.2% in the July-September quarter. Both those inflation numbers were slightly higher than they’d been in the Commerce Department’s initial report.
The report shows that Trump inherited a healthy economy when he took office last month. Growth has now topped a decent 2% for nine of the last 10 quarters. Unemployment is low at 4%, and inflation has come down from the highs it hit in mid-2022.
After lowering its benchmark interest rate three times in the last four months of 2024, the Federal Reserve left it unchanged in January and appears to be in no hurry to start cutting again. Progress against inflation has stalled in recent months.
President Donald Trump’s plans to impose tax on imports at a scale not seen since the 1930s risks raising prices and intensifying inflationary pressure. Deporting millions of immigrants working in the country illegally, as Trump has promised, could also create labor shortages that push up wages and feed inflation.
The Labor Department reported Thursday that the number of Americans filing for unemployment benefits rose unexpectedly last week to the highest level in three months. Some economists expect those numbers to tick higher as layoffs of federal workers ordered by Elon Musk’s Department of Government Efficiency start to show up in the data.
High-Frequency Economics already expects January-March GDP growth to fall below 1%, lower if Trump goes ahead with plans to slap 25% taxes on goods from Canada and Mexico. On Thursday, Trump vowed to do just that early next week.
Thursday’s GDP report was the second of three Commerce Department looks at fourth-quarter economic growth. The final estimate comes out on March 27.
President Donald Trump’s administration is directing federal agencies to develop plans to move offices away from the D.C. area.
By April 14, agencies must submit proposals for “any proposed relocations of agency bureaus and offices from Washington, D.C., and the National Capital Region to less-costly parts of the country,” according to a memo from senior officials released Wednesday.
Trump also signed an executive order requiring agencies to compile a list of their real estate holdings and identify any leases eligible for termination.
“We’re cutting down the size of government. We have to,” Trump said during the first Cabinet meeting of his second term. “We’re bloated. We’re sloppy. We have a lot of people that aren’t doing their job.”
The civilian federal workforce — excluding military personnel and postal workers — consists of about 2.4 million people. Roughly 20% of those employees work in D.C. and the surrounding states of Maryland and Virginia.
“Federal workforce employment represents about 25% of the total employment of D.C.,” said Lucy Dadayan, principal research associate with the Urban-Brookings Tax Policy Center, a nonpartisan think tank in D.C. that analyzes current and longer-term tax issues.
It also represents about one-quarter of D.C.’s gross domestic product, the total value of all goods and services produced by the city.
If agencies move away, “there could be a broad impact,” Dadayan said.
There would likely be an increase in office space vacancies and a decrease in overall consumer spending, sales tax revenue, and income tax revenue.
According to Dadayan, that “could translate into property tax revenue declines, particularly for commercial property taxes, but also on residential property taxes, because if people who lose their jobs are unable to find employment in the DMV area, they could potentially migrate to other states for employment.”
All of that would potentially lead to budget shortfalls for local governments.
“Even a 10% reduction in workforce could lead to substantial hardships for the DMV area,” Dadayan said.
Wednesday’s memo from the Trump administration directs agencies to submit their plans for a reduction in force by March 13, which would not only lay off employees but eliminate their positions altogether.
Thousands of probationary employees have already been fired, and now the Republican-led administration is turning its attention to career officials with civil service protection.
Labor unions, Democratic state leaders, and other organizations have tried, with some success, to slow Trump down with litigation, while Republicans are growing more concerned about how a slash-and-burn strategy could affect their constituents.