Kiplinger’s latest economic forecast indicates that while second-quarter GDP growth was strong at 2.8%, future growth is expected to slow. Consumer spending rebounded from the first quarter, aided by increased vehicle sales and inventory adjustments.
However, consumer caution is rising, with a low savings rate of 3.5% in the second quarter, likely to impact future spending. One-time boosts in home furnishings, vehicle purchases, and defense spending are unlikely to repeat. High interest rates and tight lending standards will keep business spending modest.
Housing and commercial construction are unlikely to see significant growth. Import growth exceeding exports means more U.S. spending supports overseas economies. State and local government spending will taper as hiring returns to normal levels.
GDP growth for the third and fourth quarters is projected around 2.0%, aligning with the economy’s long-term potential growth rate. Annual GDP growth for 2024 is expected at 2.6%, slowing to 2.0% in 2025.
— new from Kiplinger