The New York City skyline in the United States

United States Economic Forecast

United States Economic Outlook

The economy expanded a downwardly revised 2.1% in Q2 in quarter-on-quarter annualized terms (previously reported: +2.4%). This was due to a softer expansion in fixed investment than previously estimated, while growth in private and government spending was revised up. Turning to Q3, another robust GDP outturn is expected. Available data is positive: Retail sales and industrial production saw strong growth in July–August, while consumer spending on goods and services was robust in July. That said, a slowdown is on the cards for Q4. Student loan payments are due to resume from 1 October, which will dampen consumer spending, while the trickle-through effect of past interest rate hikes will also hit economic activity. Moreover, there is a high likelihood of a government shutdown in October due to disagreement in Congress over the 2024 budget, which would weigh on public spending.

United States Inflation

Inflation came in at 3.7% in August, up from July’s 3.2%. The reading was slightly above market expectations of 3.6% and well above the Federal Reserve’s 2.0% target. A far smaller annual drop in energy prices led the acceleration in inflation. Inflation is expected to average slightly above 3.0% in H2, propped up by notably higher oil prices in H2 relative to H1.

This chart displays Economic Growth (GDP, annual variation in %) for United States from 2013 to 2022.

United States Economic Data

2018 2019 2020 2021 2022
Population (million) 327 329 331 332 334
GDP (USD bn) 20,657 21,521 21,323 23,594 25,744
GDP per capita (USD) 63,165 65,505 64,370 70,999 77,187
Economic Growth (Nominal GDP, ann. var. %) 5.3 4.2 -0.9 10.7 9.1
Economic Growth (GDP, ann. var. %) 3.0 2.5 -2.2 5.8 1.9
Domestic Demand (ann. var. %) 3.1 2.5 -1.9 6.9 2.3
Private Consumption (ann. var. %) 2.7 2.0 -2.5 8.4 2.5
Government Consumption (ann. var. %) 2.0 3.9 3.2 -0.3 -0.9
Residential Investment (ann. var. %) -0.7 -0.9 7.2 10.7 -9.0
Non-Residential Fixed Investment (ann. var. %) 6.9 3.7 -4.7 5.9 5.2
Fixed Investment (ann. var. %) 5.1 2.7 -2.1 7.1 1.3
Exports (G&S, ann. var. %) 2.8 0.5 -13.2 6.1 7.1
Imports (G&S, ann. var. %) 4.2 1.1 -9.0 14.1 8.1
Industrial Production (ann. var. %) 3.2 -0.7 -7.2 4.4 3.4
Retail Sales (ann. var. %) 4.3 3.1 0.9 18.2 9.7
Home Prices Index (ann. var. %) 5.7 2.4 5.5 16.9 14.9
Disposable Income (ann. var. %) 3.6 3.1 6.4 3.2 -6.0
Wages (ann. var. %) 3.0 3.3 4.9 4.2 5.3
Unemployment (% of active population, eop) 3.9 3.6 6.7 3.9 3.5
Unemployment (% of active population, aop) 3.9 3.7 8.1 5.4 3.6
Fiscal Balance (Federal, % of GDP) -3.8 -4.6 -14.7 -12.1 -5.4
Public Debt (% of GDP) 106 108 130 126 122
Inflation (CPI, ann. var. %, eop) 1.9 2.3 1.4 7.0 6.5
Inflation (CPI, ann. var. %, aop) 2.4 1.8 1.2 4.7 8.0
Inflation (Core, ann. var. %, aop) 2.1 2.2 1.7 3.6 6.2
Inflation (PPI, ann. var. %, aop) 2.9 1.7 0.2 7.0 9.5
Federal Funds Target Rate (%, eop) 2.50 1.75 0.25 0.25 4.50
Secured Overnight Financing Rate (%, eop) 3.00 1.55 0.07 0.05 4.30
10-Year Bond Yield (%, eop) 2.69 1.92 0.93 1.52 3.88
Exchange Rate (USD per EUR, eop) 1.14 1.12 1.22 1.14 1.07
Exchange Rate (USD per EUR, aop) 1.18 1.12 1.14 1.18 1.05
Current Account Balance (USD bn) -440 -442 -597 -831 -972
Current Account Balance (% of GDP) -2.1 -2.1 -2.8 -3.5 -3.8
Merchandise Trade Balance (USD bn) -879 -857 -913 -1,084 -1,183
Merchandise Exports (USD bn) 1,677 1,655 1,434 1,766 2,090
Merchandise Imports (USD bn) 2,556 2,512 2,347 2,849 3,273
Merchandise Exports (ann. var. %) 7.7 -1.3 -13.4 23.2 18.4
Merchandise Imports (ann. var. %) 8.5 -1.7 -6.6 21.4 14.9
Foreign Direct Investment (USD bn) 203 243 96 392 345

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