ALBAWABA – The United States economy is significantly strengthening as the presidential elections approach. Strong growth and lower inflation are anticipated in the third quarter of 2024.
US economy ahead of elections
The US economy experienced strong growth in the third quarter of 2024, marked by increasing profits and lower inflation rates. Contributing factors included robust consumer spending, investments in technology, and government spending, Reuters reported .
It is worth noting that the US Department of Commerce will release the report on third-quarter gross domestic product (GDP) few days before the upcoming US elections on November 5. Voters will choose between Kamala Harris, Vice President and Democratic Party candidate, and Donald Trump, former President.
Americans are concerned about the economic situation, as food and housing prices seen a significant increase recently. Despite this, analysts are surprised by the strengthening US economy amid these challenges.
US economy's gross domestic product (GDP) increased about nearly 3.0% during the third quarter of 2024 (from July to September). (Shutterstock)
Christopher Rupkey, chief economist at FWDBONDS, said: “It looks like it's going to be a strong finish right before the election for the U.S. economy. There are some cross-currents out there, but the economy is certainly better off than it was four years ago, and it shows no signs of slowing down."
Additionally, the US Federal Reserve increased interest rates by approximately 5.25% in 2022 and 2023; however, the US economy remained strong.
According to a Reuters survey of economists, the US economy's gross domestic product (GDP) increased by nearly 3.0% during the third quarter of 2024 (from July to September).
On the other hand, consumer spending recorded an increase of about 3.5% up from 2.8% in the second quarter of 2024.
Investment in business and technology
Investments in business and technology, particularly in aircraft, contributed to the growth of the US economy's gross domestic product (GDP). Additionally, both the US government and various companies invested in artificial intelligence, further enhancing overall economic growth.
Conrad DeQuadros, a senior economic adviser at Brean Capital, stated: “If the economy shows resilience and we just have maybe some softening in the labor market, rather than a more significant pullback, then the Fed won't have to cut rates as much as it is projecting in its summary of economic projections. We will have a more gradual path of rate cuts into a higher endpoint on the Fed funds rate than what the Fed is projecting."
