U.S. economy grows 2.7% amid global slowdown

A recent report from Bloomberg showed that the U.S. economy is showing strong growth as 2024 comes to an end, and experts expect the government’s preliminary estimate of fourth-quarter gross domestic product (GDP) to show a substantial annualized growth of 2.7%.

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This booming growth has been driven largely by healthy consumer spending, fueled by a strong labor market, and a significant gap between the U.S. and other global economies. U.S. personal consumption of goods and services is expected to maintain an annualized growth rate of more than 3% for the second consecutive quarter.

In sharp contrast, the European economy has fallen into a downturn. Recent forecasts suggest that the French economy will stagnate by the end of 2024, Germany will contract slightly, and overall euro zone growth will continue a multi-year trend of modest expansion. Specifically, the Eurozone’s fourth-quarter GDP growth is expected to be only 0.1%, further highlighting the gap with the U.S. economy.

IndexBox data showed that U.S. household spending data remained strong in November, providing positive momentum for the start of 2025. The personal income and spending report is expected to show the Fed’s favored inflation measure rising slightly from last month.

Despite the challenges facing the global economy, policy adjustments in various regions remain the focus. The Fed’s decision to potentially keep borrowing costs steady contrasts with interest rate strategies around the world. In Canada, the Bank of Canada is expected to cut interest rates by 25 basis points, while similar adjustments are expected in Europe due to tariff threats and inflation concerns. Elsewhere in the world, Asian markets will remain largely calm due to Lunar New Year celebrations, with the exception of Japan, which is scheduled to release important economic data. Amid varying economic conditions, global investors continue to focus on inflation trends and policy decisions that will shape the economic outlook through 2025.

Source: IndexBox Market Intelligence Platform