US Economy Defies Expectations to Post Solid Growth in 2024

Inflation, higher-for-longer rates, struggling sectors and consumers mar a good year

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NEW YORK - Over the last few years, the US economy has consistently defied expectations for a slowdown, and 2024 was no different.

Despite uncertainty around a presidential election, elevated interest rates and a cooling labor market, economic growth remained solid this year. The US is set to be the top performer among the Group of Seven countries, according to International Monetary Fund projections.

Still, the economy was far from perfect. Inflation proved slow to recede, leading the US Federal Reserve to embrace a higher-for-longer approach to interest rates. The housing and manufacturing sectors continued to struggle under the weight of high borrowing costs, and consumers with credit-card debt, mortgages and other loans saw rising delinquency rates.

Here is a closer look at how the US economy performed in 2024:

CONSUMERS HELD UP

The answer to why the economy exceeded expectations in 2024 is the American consumer. Even as hiring slowed, wage growth continued to outpace inflation and household wealth reached new records, supporting an ongoing expansion in household spending. Bloomberg Economics forecasters estimate household outlays advanced 2.8 percent in 2024 - faster than in 2023 and nearly twice their projection at the start of the year.

...BUT CRACKS EMERGED