Solid consumer spending driven by real personal income gains and sustained private investment will underscore a steady pace of growth at or near the 1.8% long-run rate in the United States in 2024.
In the December issue of The Real Economy, RSM economists Joe Brusuelas and Tuan Nguyen offer their outlook for the coming year. They expect that policy tailwinds from both the fiscal and monetary authorities will set the stage for strong productivity and growth in the years ahead as inflation eases back to a much more tolerable 2.5% to 3% range.
Most important, Brusuelas and Nguyen are forecasting four 25 basis-point cuts in the federal funds policy rate starting in June, which would bring it into a range between 4.25% to 4.5% by the end of the year with risk of a lower rate.
For gross domestic product, their baseline forecast expects a modest easing in growth following the torrid 2.9% year-ago pace in the third quarter. Growth will then pick back up to at or above trend 1.8% in the second half of 2024 and possibly accelerate into 2025.