current
US Economic Resilience
The US economy has defied recessionary predictions, demonstrating robust growth and a resilient consumer base despite aggressive interest rate hikes.
Timeframe
near-term
Categories
Subcategories
Impact areas
Detailed Analysis
The US economy has experienced surprisingly strong growth, driven primarily by consumer spending. This resilience is attributed to several factors, including low household debt burdens, fixed-rate mortgages, and real wage growth. "This domestic demand is more sustainable but relies on consumers keeping their job and spending their wages. Thankfully, real wages continue to be supportive of consumer spending and point to further consumption ahead." This consumer strength has been a key driver of the positive economic performance, defying expectations of a recession following the aggressive rate hikes.
Context Signals
Real GDP growth between 2.5-3%
Unemployment rate around 4.2%
Inflation falling to 2.5%
Edge
The potential for consumer re-leveraging could further boost economic growth, but also carries the risk of future financial instability.
Easing bank lending standards could amplify this trend, leading to a credit boom.
The continued strength of the US consumer could drive demand for goods and services globally, benefiting exporting nations.
