US Economy’s 2024 Projections – OpEd – Eurasia Review
TL/DR –
The US economy is predicted to slow in 2024 due to factors including high inflation, increased credit card debts, and a worker shortage. Additionally, political issues such as the Congress’s failure to conclude a budget deal, potential crises in the real estate market, and international geopolitical conflicts could further negatively impact the economy. The outcomes of these economic challenges could potentially lead to a political defeat for the Democrats in the presidential elections if the public perceives the economy as struggling.
US Economy Predictions for 2024 and Its Impact on the Presidential Election
The US economy is expected to face a slowdown in 2024 due to several factors, potentially impacting the outcome of the November presidential elections. The economic deceleration majorly stems from a decrease in consumer spending caused by persistent high inflation.”
Throughout 2024, the US Chamber of Commerce projects the economy to slow down significantly, with quarterly growth rates expected to drop to 0.2% and 0.4% in the second and third quarters respectively. This is a dramatic decrease compared to the 5% growth experienced in the third quarter of 2023.
Additional factors contributing to the economic slowdown include the exhaustion of pandemic-era savings amassed during 2020-2022 and a sharp rise in credit card debt. The Federal Reserve’s inability to control inflation, which remains above the 2% benchmark, also plays a key role. Any decisions by the Fed to adjust interest rates could further impact consumer spending.
Furthermore, the worker shortage affecting the supply of goods and services could exacerbate inflation, and the US economy is not projected to generate sufficient employment to compensate for this deficit in 2024.
Political factors, such as the need for Congress to pass the budget for 2024 and 2025 and potential difficulties in raising the debt limit by January 2025, could also have negative repercussions on the economy.
Challenges in the real estate market and a potential credit crunch could further burden the economy. Decreased rental rates for office spaces and associated financial commitments could put pressure on banks and potentially impact loans to small and medium-sized businesses, requiring Federal intervention.
Business investment is predicted to be sluggish, with a projected growth of 1.75% in 2024. However, acts like the CHIPS Act and Inflation Reduction Act could drive business investments and contribute to recovery.
Geopolitical tensions, including ongoing conflicts in Russia, Ukraine, and Gaza, could also influence the state of the US economy by disrupting the global supply of essential agricultural goods.
The potential economic downturn could pose political challenges for President Biden and the Democrats. The American public’s judgment of the state of the economy could significantly alter the political landscape.
As the American people prepare to live with a slowing economy, keeping abreast of these developments and their impact is crucial.
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