One dollar bill

Global Outlook: the path ahead for the US economy

In EIU’s June 2024 Global Outlook video, head of global forecasting and economics, Tom Rafferty, and global principal economist, Steven Leslie, discuss the US economic outlook.

Despite stubborn inflation and still-high interest rates, the US economy has proved resilient so far in 2024. However, the Federal Reserve (Fed, the US central bank) will continue to try to cool the economy and reduce inflation. The target for inflation is 2% and it is currently above 3%, which is still too high. EIU expects US GDP growth to grow by 2.2% this year and by 1.8% in 2025.

“EIU’s core forecast is that the Fed will cut rates in September and then again in December this year but risks remain. If inflation remains stubborn, it is possible that the Fed will hold rates throughout the year and there is a chance that it could even raise rates. As we have seen in recent years, for example with the covid-19 pandemic and Russia’s invasion of Ukraine, unforeseen events could lead to unexpected outcomes.”

Steven Leslie, global principal economist, EIU

In addition, the US economic outlook will influence the upcoming US elections but to a lesser extent than traditionally seen. EIU narrowly expects Biden to be reelected as he has a strong story to tell on economic growth and employment rates. However, inflation and higher prices for basic goods are key factors affecting voting behaviour. There are also many non-economic issues, such as the culture wars over immigration, that are becoming increasingly important to voters. 

The analysis and forecasts featured in this video are available in EIU’s Country Analysis service. This integrated solution provides unmatched global insights covering the political and economic outlook for nearly 200 countries, enabling organisations to identify potential opportunities and risks.