US Economy Surprised Again in 2024 Despite Fed, Election Drama

An abnormally strong year brought abnormally large gains for the US economy in 2024, despite the slew of bad news that hung over the year: the Federal Reserve's pivot from inflation-focused to employment-focused policy, political uncertainty, and the lingering effects of the COVID-19 pandemic. The US economy surprised analysts and policymakers alike with its resilience and growth, even as the Fed continued to adjust its monetary policy and the political landscape shifted.

The US economy grew at an annual rate of 2.7% in 2024, according to S&P Global Ratings' U.S. economic forecast (Table 1). This growth was driven by strong consumer spending, which increased by 2.5% in 2024, up from 2.2% in 2023. The increase in consumer spending was a significant contributor to the overall economic growth, despite signs of a slowdown in discretionary consumption.