US economic resilience spurs growth expectation shift
Date
5/26/2024 9:19:21 AM
(MENAFN) The resilience of the US Economy has led to a notable shift in growth expectations, as highlighted by QNB in its economic commentary. Initially, forecasts for 2024 reflected widespread pessimism due to significant headwinds, including high inflation rates, disruptive commodity markets, and extensive monetary policy tightening by the Federal Reserve Board. These factors fueled discussions about the possibility of an imminent recession, with debates revolving around the likelihood of a "hard" or "soft" economic landing.
The survey consensus, which tracks forecasts from various analysts, think tanks, and research houses, provides valuable insights into market expectations and evolving views on major macroeconomic developments. Last July, the consensus for US economic growth in 2024 hit a low of 0.6 percent. However, it has since experienced a steady upward trajectory, increasing by a remarkable four-fold to 2.4 percent this year. This upward revision is attributed to better-than-expected economic indicators, including a surprisingly robust GDP print for the final quarter of 2023. These indicators suggest that the economy remains fundamentally sound and is expected to gradually decelerate compared to the 2.5 percent expansion seen in 2023.
In this analysis, we delve into the evolution of three key production sectors and their leading indicators, which underscore the resilience of the overall economy and its gradual deceleration. Firstly, the service sector has demonstrated remarkable strength following the normalization phase post-Covid pandemic. GDP figures for the first quarter of this year revealed a significant annualized growth rate of 4 percent in service consumption, surpassing the 2.3 percent expansion seen in 2023.
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