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GDP grows at slower rate in 2025 and 2026Dr. Bill Conerly using historical data from U.S. Bureau of Economic AnalysisThe economic forecast for 2025 shows growth, but at a slower pace than 2024. Inflation will remain above the Federal Reserve’s target, with President-elect Trump’s policies limiting production while stimulating spending. The greatest risk is not a recession but limited production capability as immigration falls.
Economic Momentum Entering 2025
The United States economy has grown nicely through 2024. The last two quarters in particular grew faster than the long-run average, and the Atlanta Federal Reserve’s GDPNow estimate for the fourth quarter continues the above-average trend. Employment grew every month this year (though we don’t yet have December 2024 data).
Consumer spending rose nicely, up nearly four percent over the past 12 months after adjusting for inflation. Most everyone who wants a job has one, and wages are now rising faster than inflation. Although consumer borrowing is not growing rapidly, household bank balances remain elevated thanks to those stimulus checks that went out during the pandemic. This will be the bright sector for 2025’s economy.
Construction across all sectors has been roughly flat, with the surge in data centers and semiconductor fabrication plants offsetting declines in residential and commercial building. Business …
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