WOW: U.S. Economy GREW In Anticipation Of Trump Inauguration

The U.S. economy closed 2024 with a robust 2.3% growth rate, driven by strong consumer spending, but challenges loom on the horizon as President Trump prepares to take office.

That’s called the Trump Effect!

At a Glance

  • U.S. economy grew 2.3% in Q4 2024, slightly below expectations
  • Consumer spending surged 4.2%, the fastest pace since early 2023
  • Full-year GDP growth for 2024 was 2.8%, compared to 2.9% in 2023
  • Inflation remains above the Federal Reserve’s 2% target
  • President Trump inherits a healthy economy with steady growth and low unemployment

Economic Growth Defies Expectations

The U.S. economy demonstrated its resilience in the fourth quarter of 2024, posting a solid 2.3% growth rate despite various challenges. This performance, while slightly below the anticipated 2.4%, showcases the economy’s underlying strength. The full-year GDP growth for 2024 stood at a respectable 2.8%, only marginally lower than the 2.9% recorded in 2023.

Consumer spending emerged as the primary driver of this growth, increasing at a robust 4.2% pace – the fastest since early 2023. This surge in consumer activity offset declines in other areas, particularly business investment. The economy’s performance is especially noteworthy given the headwinds it faced, including a strike at Boeing and the aftermath of two hurricanes.

Inflation Concerns Persist

Despite the positive growth figures, inflationary pressures continue to be a concern for policymakers. The Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation gauge, rose to a 2.3% annual pace in the fourth quarter. More worryingly, core PCE inflation, which excludes volatile food and energy prices, stood at 2.5% – still above the Fed’s 2% target.

“We do not need to be in a hurry to make more cuts,” Federal Reserve Chairman Jerome Powell said.

The Federal Reserve’s stance on interest rates remains cautious. After a series of rate hikes in 2022 and 2023, the central bank has left rates unchanged in recent meetings. This approach contrasts with that of the European Central Bank, which has already begun cutting rates, highlighting the relative strength of the U.S. economy compared to European stagnation.

However, the President has already explicitly called on the Federal Reserve to keep making cuts.

At present, the unemployment rate stands at 4.1%, and growth has been steady for a short while. However, the economic outlook for early 2025 remains uncertain, with some analysts predicting a potential slowdown.

But Trump is preparing to prove them all wrong.