The (Not So) Little Economy That Could
By Tom Richmond, Co-Head of Taxable SMA Strategies, Senior Portfolio Manager
By now, you are probably tired of reading (although still wondering how so many folks get paid so much to be so wrong) that the U.S. economy must be in, or heading into, a dark, recessionary period. These dire predictions have been a steady drumbeat since the upturn in the data spurred by the first COVID-era stimulus packages in 2020 and 2021. Wrong. Decidedly and wildly wrong. 2024 may go down as one of the strongest economic years in our nation’s history. Real growth in GDP will come in above 2% for the year (and maybe closer to 3%), a level thought by many economists to be near its maximum sustainable level. Unemployment ticked up slightly last year, but remains historically low in percentage terms, and inflation, while still above the U.S. Federal Reserve target, has moderated nicely. These results are even more astounding given that nominal interest rates rose several percentage points over this period. How did this happen, and is it sustainable into 2025?
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