U.S. Economy Ends 2024 Strong, But Uncertainty Looms
Anya’s Market Bites:
The U.S. economy wrapped up 2024 with solid growth, largely driven by strong consumer spending. However, economic uncertainty remains due to inflationary pressures, fluctuating business investments, and potential policy changes.
Key Takeaways:
Steady Growth: GDP grew at a 2.3% annual rate in Q4 2024, bringing the full-year growth to 2.8%—only slightly below 2023’s 2.9% expansion.
Consumer Spending Boom: Spending increased 4.2%, the fastest rate since early 2023, demonstrating consumer confidence.
Inflation Concerns: The Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation measure, rose to 2.3%, up from 1.5% in Q3.
Interest Rate Pause: The Federal Reserve maintained its benchmark interest rate, signaling a wait-and-see approach after three cuts since September.
Business Investment Decline: Despite strong consumer activity, business investment fell, particularly in equipment.
Global Economic Contrast: While the U.S. economy shows resilience, Europe recorded zero growth at the end of 2024, leading the European Central Bank to cut interest rates.
Policy Uncertainty: Proposed tax cuts and deregulation may boost growth, but potential import taxes and mass deportations could slow economic expansion and drive up costs.
For real estate professionals, these trends suggest continued market activity fueled by consumer confidence, but potential headwinds from inflation and shifting government policies. Keeping an eye on interest rates and economic policies will be key in 2025.
(Source: PBS News)
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Anya Derebenskiy
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