High prices and high interest rates are making people spend less, which is dragging things down. But some analysts are hopeful that things might pick up later in the year, potentially hitting a 2% growth rate if inflation eases up and interest rates go down.

But Jay Powell doesn’t seem all that eager to cut rates, so…

See consumer spending is a huge part of the U.S. economy—around 70%. But lately, it’s cooling off. People burned through their pandemic savings and are now looking for cheaper options. 

This is hitting businesses that rely on discretionary spending. However, not all the news is bad; retail sales have shown some surprising strength, so not everyone is cutting back just yet.

The job market is still holding up, even though the unemployment rate has inched up to 4.1% as of June 2024. Job openings have decreased, but it’s not all doom and gloom. 

There’s a lot of talk about a recession, but many top economists, including those at Vanguard and the Conference Board, don’t think it will happen. Not in 2024 at least.

The Sahm rule, which predicts recessions based on rising unemployment, isn’t showing a clear signal right now due to mixed data from the labor market.

The 2024 elections are adding to the uncertainty. Many financial institutions in process of changing the economic policies affecting the growth anticipating Donald Trump wins. 

The IMF is concerned about how the U.S. will manage its high debt levels and potential trade tensions amid funding Ukraine and Israel. These things affect the economy both domestically and globally.