According to the consulting firm Deloitte, the available evidence suggests that the authorities may have managed to control inflation without causing a recession.
The consulting firm’s base scenario remains relatively positive, as it expects that the industrial construction boom will continue to boost the economy’s potential in the coming years.
Also in the near term, a faster pace of interest rate cuts by the Federal Reserve (Fed) should allow households to take on more debt and support continued growth in consumer spending.
“Overall, the story of the US economy remains positive. Consumer spending remains stronger than expected and is expected to increase 2.4% in 2024,” notes the consultancy.
But there are risks that he sees centered on two interrelated issues: geopolitical conflicts and trade policy, which can combine to generate persistent inflation.
In employment, employment growth is expected to continue to slow and demographic changes are expected to continue to reduce the labor force participation rate.
Debt and interest raise concerns
The Committee for a Responsible Federal Budget, a nonpartisan organization in the United States, points out that the winner of the 2024 presidential election will face many fiscal challenges, some of which are new and others that have existed for many years, but the most are increasingly urgent.
The first challenge is record debt levels, which are on track to reach a record 107% of GDP by the end of fiscal year 2029 and by 2033, debt will reach 115% of GDP or even higher, if policymakers continue to take action. irresponsible tax decisions.
The second is rising interest costs. During the next presidential term, interest will be the fastest growing part of the budget. Interest costs are projected to exceed total defense spending by fiscal year 2027 and reach a record 3.2 percent of GDP by 2030.
The economy in the eyes of voters
The global analysis and consulting firm, Gallup, points out that the economy is the most important issue for US voters they say, and that it has weight in their choice of president.
According to their survey, the majority of voters, 52%, say the economy is “extremely important” in their vote and 30% rate it as “very important,” meaning the issue can be a significant factor. for nine out of ten voters.
Voters consider Donald Trump more capable than Kamala Harris of managing the economy 54% to 45%.
This is how the US economy is doing with Joe Biden
1. Considering the IMF projection for this year, the average US GDP growth would be 3.5%, above the 1.4% of his predecessor Donald Trump, who closed his administration with a negative rate due to the impact of Covid-19.
2. On the issue of inflation, Joe Biden has not done so well, as it registers higher levels than Trump; 2022 was the worst for the Democrat with inflation of 8%.
3. Job creation has suffered a sharp slowdown in Biden’s recent years, but this is enough for him to surpass Trump, since 9.2 million jobs were lost in his administration in 2020 due to the pandemic.
4. In the trade balance, imports are growing more than exports, this has caused the trade deficit to be greater under Biden.
5. Fed interest rates register a significant increase during the Biden administration. In 2023 it reached its highest level in two decades.
