Economists raised their US growth projections through early 2024 and trimmed the odds of any downturn to a one-year low as consumers continue to spend. The American economy probably expanded at an annualized 3.5% rate in the third quarter, the fastest in nearly two years, as forecasters marked up their household spending forecasts. And while growth is seen slowing in the following two quarters, economists in the latest Bloomberg monthly survey still raised their estimates for gross domestic product.
As always, it’s about the jobs. A brawny US labor market continues to support household spending despite the burden of high borrowing costs and lingering inflation. Employment projections for the next year were even revised higher. “The US economy has had a stellar summer,” said James Knightley, chief international economist at ING. “Robust consumer spending has been the main driver, with households keen to maintain their lifestyles by tapping savings and borrowing on credit cards while inflation continues to eat into spending power.”