Important points
Despite the pandemic’s devastating effects, the U.S. economy is now growing faster than forecasters expected before the coronavirus outbreak. Resilient consumer spending and employer hiring have lifted the economy against all odds. Economists are optimistic that growth will continue. In the near future.
The economy is doing better than most people thought a few years ago, and even better than pre-pandemic expectations.
The third-quarter gross domestic product (GDP) report released Wednesday provided a stark reminder of the U.S. economy’s rapid recovery from the pandemic and the resulting explosion of high inflation. The annual growth rate of 2.8% was lower than what economists had predicted just before the report was released, but still far higher than forecasters expected four years ago.
In January 2020, Congressional Budget Office forecasters predicted the economy would grow at an annual rate of 1.6% from 2023 to 2024. Instead, economic growth, which plummeted during the pandemic, has rebounded with a vengeance, surpassing previous highs.
Professor Jason Furman said: “Overall, the U.S. economy continues to be surprisingly strong, growing much faster than anyone expected six months or a year ago, with inflation falling and consumer spending rising. “The economy is doing very well and companies are investing at high interest rates.” in economics from Harvard University, former chief economic advisor to President Barack Obama, and posts on social media platform X.
Although there have been some bumps along the way, the most important parts of the economy have weathered every storm since the start of the pandemic. Consumers continued to spend and businesses continued to hire. Inflation has fallen to near pre-pandemic levels.
In 2022, many forecasters expected high unemployment to send the economy into a slump as the Federal Reserve raised borrowing costs to fight inflation. Instead, the unemployment rate hit a 50-year low last year and has risen only modestly since then.
Many economists are optimistic about the outlook.
“Unless we experience a shock, a recession seems unlikely,” Oren Krachkin, a financial markets economist at Nationwide, said in a commentary.
