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In 2024, America’s economy bounced back from the COVID-19 lockdown recession with great speed, igniting newfound national excitement. By the closing bell on Wednesday, the Dow Jones Industrial Average reached new highs for the year, reaching 37,903. Over the same time frame, the Nasdaq composite also reached 15,605, and by 2024, the US equity markets are headed in the correct direction.
In addition, although more slowly than in 2023, America’s economy grew in the first quarter of 2024. The first quarter GDP growth “advance” estimate from the government came in at an annualized rate of 1.6%.
<h2 class="wp-block-heading" id="affluent-americans-are-driving-the-2024-us-economy">Affluent Americans are driving the 2024 US economy&nbsp;</h2>
In America, this time around, wealthy US citizens are propelling the 2024 economy rather than the middle class. Rich Americans who bought government bonds in 2024 got higher returns than their peers. Because of this development, the Fed is probably holding off on cutting rates this year.
America’s economy is being sustainedly boosted by older Americans. Gaining from enormous increases in the property and stock markets over the last few years, they now account for a bigger portion of consumer expenditure, which is the main engine of America’s economic development than ever.
Furthermore driving up those costs—and inflation—is the fact that a large portion of their expenditure goes into more expensive services like entertainment, health care, and travel.&nbsp;
As such spending seldom involves borrowing, it is comparatively resistant to the Federal Reserve’s attempt to restrict growth and control inflation through increased borrowing rates.
Should they buy government bonds, wealthy senior citizens could potentially be profiting from the Fed’s rate increases. Higher bond rates brought on by those hikes have increased income for bondholders.
America’s economy has beaten predictions of a severe downturn in large part because of the so-called “wealth effect,” in which consumers feel confident enough to boost their spending as home and stock values rise. Unexpectedly strong, it is making inflation stickier and has compelled the Fed to change its plans.
5 years later, Americans’ wealth had exploded from $98 trillion at the end of 2018 to $147 trillion. Once inflation is taken into account, the gains are still significant but less striking.
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
 People have had significant wealth gains in stocks, significant wealth gains in fixed income, significant wealth gains in home prices, significant wealth gains even in crypto. <cite>Torsten Slok, chief economist at the Apollo Group</cite>
</blockquote>
<h2 class="wp-block-heading" id="america-s-economy-at-risk-of-a-recession">America’s economy at risk of a recession?</h2>
America’s economy experienced growth in the first quarter of 2024, although it was more moderate compared to the previous year. The government’s initial estimate for first quarter Gross Domestic Product (GDP) growth was reported at a 1.6% annualized rate. This happened despite the widespread anticipation in the market for first quarter growth to surpass 2%.
America’s consumer spending has remained a crucial driver of the solid growth pace in 2023, and it continued to play a significant role in contributing to the growth in the first quarter of 2024.
As per the U.S. Bureau of Economic Analysis (BEA), consumer spending on goods decreased in the first quarter, while spending on services saw growth. Nevertheless, the growth of consumer spending in the fourth quarter of 2023 was slower compared to previous periods. The healthcare, financial services, and insurance categories experienced the most significant increases in spending on services.
<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-us.googleusercontent.com/j0r9I4chZe4qb1qNxrOLLA-syLRa5WQm_flT_kW7ovVfGF_MOeYEgzXTYBL5GFFFzSKKbv4q7uk__Djg1kT3KeKZjmuaLs5TEQDfLlDZlriqhb_bQzPVuUMWluJPqOoi28f5O-UbNSlHAe8f1TMf4Zk" alt="" style="width: 100%;height:auto">
</figure>
Source: U.S. Bureau of Economic Analysis, “Real Gross Domestic Product and Related Measures: Percent Change from Preceding Period,” April 25, 2024.
The economic growth in the first quarter of 2024 was influenced by several factors. These included reduced federal government spending, a decrease in inventory investment in the wholesale trade and manufacturing sectors, and an increase in imports, all of which had a negative impact on the GDP.
It’s worth noting that the initial estimate of the first quarter’s annualized GDP growth rate is 1.6%. The BEA is set to release updated first quarter numbers at the end of May and again at the end of June, incorporating more complete <a href="https://www.usbank.com/investing/financial-perspectives/market-news/economic-recovery-status.html" rel="noopener noreferrer nofollow" target="_blank">data.</a>
Has the Federal Reserve successfully achieved what some economists call a “soft landing” for the economy, preventing a recession while also curbing inflation? The most recent data raises uncertainty about the economy’s ability to sustain its momentum and whether the risk of inflation is fully under control.

America’s 2024 economy saved by old money – All you need to know

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