Economy achieves miracle before 2024 US election, surpassing developed countries, people have their own worries

The US economy delivered a remarkable and historic performance in the third quarter of 2024. However, with just days to go until the presidential election, a majority of voters say they are still dissatisfied with the economic situation.

The resilience of consumer spending – which accounts for about two-thirds of all activity in the US economy – has played a major role in the country's growth. (Source: Getty Images)

Recently, the US Department of Commerce released data showing that Gross Domestic Product (GDP) - a measure of all goods and services produced in the economy - grew 2.8% in the third quarter of 2024.

This pace is slightly weaker than the 3% rate in the second quarter of 2024 but higher than the 2.6% rate predicted by economists in a poll by FactSet - a US financial data and software company based in Norwalk, Connecticut (USA).

Previously, the non-profit organization The Conference Board said that in September 2024, the world's largest economy added 254,000 jobs, inflation was just a little bit away from the US Federal Reserve's 2% target, and consumer confidence soared, at the fastest pace since March 2021. All of these are signs of a strong economy.

“I think we should have called for a soft landing right now,” said James Bullard, former president of the St. Louis Fed. “The economy has finally achieved that scenario. Inflation has been controlled without a recession — an extremely rare achievement.”

Consumer sentiment remains gloomy

The resilience of consumer spending — which accounts for about two-thirds of all activity in the US economy — played a major role in this growth.

In addition, the US government's relentless spending is driving the federal budget deficit to more than $1.8 trillion in fiscal year 2024.

Personal consumption expenditures — a measure of consumer activity — rose 3.7% in the quarter, marking the strongest quarterly gain since the first quarter of 2023. Federal government spending rose 9.7%, with defense spending rising 14.9%.

The personal consumption expenditures (PCE) price index, the Fed's preferred inflation gauge, rose 1.5% in the third quarter from a year earlier, below the Fed's 2% target and a sharp deceleration from the 2.5% increase recorded in the second quarter.

However, the core PCE - which excludes energy and food - still rose 2.2%. Fed officials believe that core inflation is a more accurate measure of long-term price trends.

The Fed cut interest rates in September — the first in more than four years — by a bold half-point, signaling that Fed officials were confident that inflation was under control enough to begin cutting rates, shifting more attention to the job market.

Despite all of these gains, consumer sentiment remains more subdued than it was before the Covid-19 pandemic, according to CNN .

According to many experts, commodity prices are now much higher than they were in 2019 - the time before the pandemic. The Fed has acted aggressively to slow inflation, but the lingering "trauma" of high inflation remains.

A recent study by the Brookings Institution found that Americans feel very gloomy, despite a strong economy.

“There’s a perfect combination of strong growth and slow inflation,” said Dan North, an economist at Allianz Trade North America. “But a lot of people don’t want to live with high inflation. That’s why they still think the economy is bad.”

America is far ahead of advanced economies

US President Joe Biden praised the strength of the world's largest economy after the GDP for the third quarter of 2024 was announced.

"How far America has come since I took office - from the worst economic crisis because of Covid-19 to the strongest economy in the world," said Mr. Joe Biden.

A White House official believes that the average annual economic growth under the Biden and Harris administration is stronger than any administration this century.

The International Monetary Fund (IMF) expects the country's GDP to grow at an annual rate of 2.5% in the fourth quarter of 2024. This would be the strongest growth among major advanced economies.

Source: https://baoquocte.vn/kinh-te-dat-ky-tich-truoc-them-bao-cu-my-2024-vuot-xa-cac-nuoc-tien-tien-nguoi-dan-co-noi-lo-rieng-292147.html