The US economy has revived before Trump joined the post. Can it be much better?

Jeffrey Bartash

GDP in the fourth quarter will demonstrate the dynamics of economic development after Trump’s return to the White House

Donald Trump has promised to intensify the US economy, but it has been developing rapidly for more than two years and probably completed 2024 another burst of powerful growth.

According to the GDPnow Federal Reserve, the Atlanta, the gross domestic product, the official system of economic indicators, could increase by 3% a year in the fourth quarter. The GDP report will be published next Thursday.

Other DJIA SPX companies from Wall Street forecast an increase of 2% to 3% in the fourth quarter, contributing to the active season of holiday purchases. Over the past three months last year, consumer costs have been higher than expected.

If these figures are accurate, GDP growth for the entire 2024 year will be from 2.4% to 2.7%.

How good is it?

The economy increased by about 2.4% a year before the pandemic explosion in 2020. So the figures would be about the same.

What makes it even better is that the economy should not develop so quickly after the pandemic.

Until recently, the Wall Street Djia SPX economists and high -ranking officials of the Federal Reserve System believed that the US annual growth would be less than 2%.

They believed that anything rather would overheat the economy and ignite inflation in the long run.

It is too early to talk about whether the United States has entered a higher growth plateau, but economists point to two unexpected trends: population growth and amazing productivity increase. GDP growth in the long run is largely determined by these two factors.

Population and labor size increased due to the recovery of legal immigration and the flow of unauthorized migrants in the United States

The productivity, the true elixir of economic growth, also increased much faster than expected. This is an even more important factor.

Economists attribute this to the wider use of technologies such as artificial intelligence and other measures that help workers to produce more goods and services over the same period of time.

However, it is far from clear whether productivity will continue its recent high dynamics after years of low rates.

The economy is also not deprived of certain problems.

Let’s take inflation. Prices are still growing faster than low levels to pandemic, and the cost of most goods and services is 20-30% higher than the latest when Trump was in office. The disappointment of the Americans overturned in the last elections and cost Democrats of the White House.

Hire has also slowed down since last year, and although unemployment is very low, people who have lost their work need a lot more time to find another.

High interest rates, for their part, have led to a decline in home sales and new vehicles and compressed business investments.

Interest rates can also remain relatively high if the economy continues to exceed the rate of the economy – if you assume that rapid growth can maintain high levels.

“The resilience of the US economy confirms our opinion that the federal reserve system is carefully suited to the reduction of rates and, in the end, will leave rates unchanged in 2025,” – say BNP Paribas economists.

Trump’s own economic proposals, meanwhile, carry danger and promise as his second term begins.

He promised to reduce the rules, reduce taxes and make energy cheaper to satisfy businessmen.

However, they are also afraid that its plans sharply increase tariffs and deport millions of unauthorized immigrants will increase the cost of materials and labor and increase inflation.

And yet the overall tone is optimistic. And the first studies of how the economy works at the beginning of Trump’s presidency seemed to confirm this opinion.

“The United States is starting in 2025 in a sublime mood, hoping that the new administration will help stimulate economic growth,” said Chris Williamson, the Chief Business Economist of S&P Global.

The rest of the world also noticed it.

Last week, the International Monetary Fund raised its growth forecast for the United States in 2025 to 2.7% from 2.2%, while reducing the rating of most other major economies.

In other words, the US economy is again leading in a world pack.

– Jeffrey Bartash

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