Overview of the 2024 Economy: Surprises and Concerns

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The U.S. economy pushed through higher interest rates and election-year uncertainty in 2024, but several warning signs emerged beneath the surface.

Key Facts:

The U.S. led G7 nations in economic growth, based on IMF projections.
The Federal Reserve cut rates by a full percentage point this year, yet inflation remained above its 2% target.
Housing and manufacturing were hit hard by high borrowing costs.
Bloomberg Economics estimates consumer spending rose 2.8% in 2024.
President-elect Donald Trump’s policy plans may affect manufacturing in 2025.

The Rest of The Story:

Growth stayed positive despite a softer labor market and elevated rates, Bloomberg reports.

Households spent more as wages kept climbing, helping extend the economy’s expansion. However, rising delinquency rates for credit cards and other loans signaled trouble for some borrowers, especially those with lower incomes.

Inflation cooled from earlier peaks but remained stubborn above the Fed’s 2% goal. The central bank responded by lowering rates to relieve pressure on businesses and consumers, though Fed officials hesitated to move further without clearer evidence of slower price growth.

Meanwhile, housing and manufacturing felt the impact of tighter financial conditions. Mortgage rates hovered around 7% near year’s end, and manufacturers reduced payrolls to cut costs.

Commentary:

Although the headline numbers suggest the economy never fully lost momentum, families across the country have felt the pinch from persistent inflation. Price increases weighed on budgets, and many workers found that their paychecks did not stretch far enough.

These concerns likely influenced the presidential election, where voters pointed to everyday financial stress as a key issue. There is a sense that, while overall output stayed strong, many individuals remain uneasy about their financial futures, and that sentiment shaped the political landscape.

The Bottom Line:

The U.S. economy stayed on a steady growth path in 2024, but underlying weaknesses in consumer debt, housing, and manufacturing raise critical questions. As a new administration prepares to take office, many Americans continue to seek relief from inflation and stagnant wage growth.

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