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A report published in 2024 by Fitch Ratings stated that the U.S. economy is slowing because of 2023 outsized fiscal impulse fades, imports recover, and credit growth remains week. And this could have implications for years to come.
“Fitch Ratings has raised its forecasts for world growth in 2024 in its latest Global Economic Outlook as confidence in European recovery prospects improve, China’s export sector revives and domestic demand in emerging markets excluding China (EM excl. China) shows stronger momentum. The US is slowing but only gradually and our 2024 growth forecast is unchanged at 2.1%,” the group wrote in their report. (TAKE A POLL: Do You Feel Confident About the Current State of the Economy?)
In the U.S., the household-sector labor income is said to be growing at a decent rate, and household finances don’t point to a sudden jump in the saving ratio.
“Domestic demand has weakened in China as the property market collapse worsens and private consumption growth remains anaemic. But fiscal policy is being loosened and exports have rebounded, helping real GDP. Deflationary pressures are, however, widespread.”
What Does This Mean?
“The global monetary policy cycle is entering a new phase, in which rates will be falling slowly but to levels that will still be restricting demand. We expect the ECB to cut rates twice more this year, and the Fed to start cutting rates in September with another cut in December. This is later than we had expected, reflecting stalled disinflation momentum in the first four months of the year. But US wage growth is gradually cooling,” the group noted. (TAKE A POLL: Is the Government Doing Enough to Address Unemployment?)
As of May 2024, the University of Michigan said that the U.S. economy is expected to maintain a health momentum into 2025. However, this report came well before our financial upheaval following the presumed nomination of Vice President Kamala Harris to the democratic candidate for president, leading to uncertainty in the global market about U.S. stability. This is coupled with heightened tensions with the Middle East.
It seems like there is a generalized uncertainty, leaning into hopefulness about the economic future for Americans in 2025.
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