In what seems to be a promising start for the year 2024, the White House is optimistic about key economic indicators, highlighting higher consumer spending during the holiday season, real wage gains, and a notable surge in consumer confidence. They say these suggest a robust start for the U.S. economy in 2024.
Optimistic Economic Signals
Jared Bernstein, Chair of the White House Council of Economic Advisers, conveyed these positive signals during an interview on “Fox News Sunday,” emphasizing President Joe Biden’s commitment to further reducing costs for Americans if he secures a second term in the upcoming November 2024 presidential election.
Economic Momentum
“If you actually look at the trend in the economy… I think you see some real momentum getting us in a good start for the new year,” remarked Bernstein.
Consumer Confidence Surge
One significant factor contributing to this optimistic outlook is the surge in U.S. consumer confidence, reaching a five-month high in December.
A Positive Trend
The Conference Board’s report on December 20 highlighted this positive trend, aligning with the University of Michigan’s Consumer Sentiment Index, which experienced a nearly 14% increase – its most significant jump in over three decades.
Surpassing Pessimism
This shift indicates a notable change from the widespread pessimism about the economy that has prevailed for much of Biden’s term.
Inflation Easing
Joanne Hsu, the director of the Michigan survey, noted that the December upswing reversed declines from the previous four months, attributing these positive trends to substantial improvements in how consumers perceive the trajectory of inflation.
Drop In Gas Prices
Throughout 2023, inflation has notably eased. The Consumer Price Index from the Labor Department, which started the year with annual price increases averaging 6.4%, had reduced to 3.1% by November.
Bernstein highlighted the drop in gasoline prices, falling below $3 a gallon in more than half the states.
Prices Expected to Continue Dropping
GasBuddy.com’s annual outlook predicts a potential 13-cent drop in the U.S. national average retail gasoline price for the upcoming year, marking a second consecutive year of decreasing fuel costs.
Year-End Spending Trends
Bernstein affirmed that the Christmas season has been robust, with spending at restaurants increasing by 8% from November 1 to Christmas Eve.
Additionally, online sales rose by 6%, contributing to an overall retail spending increase of 3%.
Business Startup Boom
Bernstein also highlighted significant gains in the startup of new businesses, particularly among people of color. According to Bernstein, this surge reflects increased optimism and confidence in the U.S. economy.
Wealth Increases
While acknowledging the growing optimism, Bernstein also mentioned the administration’s monitoring of rising credit card debt.
However, he characterized it as a return to normal levels. He pointed to record increases in wealth among Americans of all income levels, including people of color, as a counterbalance to any potential negative impact from rising debt levels.
Geopolitical Risks
Despite this positive economic outlook, the Biden administration remains vigilant about potential geopolitical risks.
Ongoing conflicts, such as Russia’s war in Ukraine, pose the risk of disrupting grain markets and potentially driving up inflation.
Ongoing Conflicts
Ongoing conflict in the Middle East increases the threat of regional escalation, which could lead to increased prices and disruption.
Militant attacks in the Red Sea have also caused a disruption in world trade, prompting major cargo shipper Maersk to temporarily suspend sailings through the Red Sea after an attack on one of its vessels.
2024 Economic Outlook
As the Biden administration keeps a watchful eye on domestic and international factors, the overall economic outlook for the United States in 2024 appears to be marked by positive momentum and a period of sustained growth, focusing on addressing potential challenges and maintaining economic stability.
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