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Page 15 of 22 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org <br />In the Economic Update, we briefly examine a few key drivers in the national, state, and local economies <br />as part of an environmental scan to inform the development of next year’s budget. <br />National Economy <br />The national economy continued to show strength in 2024, with Real Gross Domestic Product (GDP) <br />hovering around 3% in the fourth quarter, where it has been for the last nine quarters. Inflation concerns, <br />as measured by the Consumer Price Index (CPI), that led to a rise in interest rates in the post-COVID years <br />continued to temper in 2024, resulting in the Federal Reserve taking its first steps in the latter half of 2024 <br />to lower interest rates for the first time in four years. That said, inflation remained a concern as 2024 <br />came to a close and the Federal Reserve signaled a pause in interest rate reductions in early 2025. These <br />inflation concerns bore out on February 12, 2025 when January 2025 CPI figures were released by the U.S. <br />Bureau of Labor Statistics, as described in this CNN article. <br />It’s not just eggs. Many commonly purchased goods and services got more expensive in <br />January, driving inflation in the wrong direction and to its highest rate since June of last year. <br />Consumer prices rose 0.5% from December – the fastest pace since August 2023… <br />8.A. - Page 15 of 70 <br />180