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Monthly update of The Conference Board's forecast for the US economy
US economic data continue to surprise to the upside, revealing ongoing resilience despite looming uncertainties and persistent shocks. We now expect real GDP to expand by 2.6 percent year-over-year in 2024, an upward revision from 2.4 percent. Some moderate growth at yearend and early next year may constrain annual 2025 growth to 1.7 percent despite expectations of stronger quarterly annualized growth over the course of that year. Slowing inflation and a healthy labor market should support measured interest rate cuts over the course of the next year, lowering the Fed Funds rate target range to 3.00-3.25 percent in 2025.US Economy Displays Continued Resilience
Second-half Growth Tracking Exceeding Expectations
Real GDP growth for Q3 2024 is revised up again to 2.5 percent Q/Q annualized from a lackluster 0.8 percent in prior forecasts. The upgrade to real GDP growth largely reflects evidence of stronger consumer spending, increased after-tax income, and higher savings among US households, as well as a healthy labor market that continues to support consumption. Additionally, an influx of imports in anticipation of the East- and Gulf-Coast port strike likely boosted inventories, offsetting some of the expected net exports drag.
While businesses have held back on major capital investments, likely amid US elections uncertainty, they are pouring dollars into IP and human capital. This likely persisted in Q3. Industrial policies continue to drive government spending, and nonresidential investment in infrastructure and factories in the quarter. Residential investment likely remained weak as the Fed only began its
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