While not an absolute measure of a country’s economic health, a nation’s gross domestic product (GDP) is one of the primary indicators measured to gauge as much. And, according to recent projections by the International Monetary Fund (IMF) detailed by Bloomberg, the United States is set to end 2024 on a high note — particularly when compared to its peers comprising the G7.
According to IMF estimates released in October, the United States is projected to have seen GDP growth of 2.8% over the course of 2024. This compares very favorably to other nations comprising the G7, who the IMF expects to perform as follows:
Of the seven nations profiled, only three saw their GDP projections increased by the IMF versus prior reporting: the United States, France, and the UK. Canada and Italy’s estimates remained unchanged since the IMF’s former report, while Japan and Germany saw their projections revised downward in October.
As the U.S. Bureau of Economic Analysis (BEA) reported, retail trade was responsible for the bulk of the nation’s GDP growth.
“Within private services-producing industries, the leading contributors to the increase were retail trade (led by motor vehicles and parts dealers); health care and social assistance (led by ambulatory health care services); and information (led by data processing, internet publishing, and other information services),” the BEA wrote.
According to the bureau’s data, the retail sector itself was credited with a full 1% of the 3.1% Q3 increase suggested by BEA research. Beyond that, supply chain markers such as manufacturing also posted significant contributions. The BEA indicated that durable goods (notably other transportation equipment) and nondurable goods manufacturing (a category led by chemical products) were each responsible for 0.16% of the total 3.1% growth.
The BEA provided a broad snapshot to explain the foundations of the GDP’s recent acceleration:
“Compared to the second quarter, the acceleration in real GDP in the third quarter primarily reflected accelerations in exports, consumer spending, and federal government spending. These movements were partly offset by a downturn in private inventory investment and a larger decrease in residential fixed investment. Imports accelerated,” the BEA outlined.
While current GDP projections may look rosy as 2024 winds down, the future looks to hold more modest figures — at least according to a Deloitte report.
Analysts Ira Kalish and Robyn Gibbard offered up a number of scenarios. In one scenario (the most likely, according to the authors, and thusly titled “baseline”) targeted tariffs and selective deportations might lead to tamer, though still positive, growth in the years to come.
“Overall, our modeling shows real GDP growth of 2.4% in 2025 before slowing to 1.7% in 2026. GDP growth then ranges from 1.9% to 2.1% between 2027 and 2029,” Kalish and Gibbard suggested of the baseline scenario.
Alternate scenarios (“Tax cuts, trade deals and deregulation,” at a 30% likelihood, and “Accelerating inflation and shrinking population,” pegged at a 20% likelihood) would lead to greater and diminished GDP growth, respectively, versus the baseline scenario, per the Deloitte analysts.
