The US economy displayed continued strength in Q3 2024. Despite a high-interest rate environment, real gross domestic product (GDP) grew by 2.8 percent at annualized rates, supported by both consumer and governmental spending alongside heavy export demand.

Following July 2024’s Employment Situation publication of weak labor market data, US jobs data has shown resilience, with the unemployment rate mostly falling for the last three months and now settling upward at 4.2 percent in November 2024. This recent trend has influenced the US’s economic durability.

Inflation has receded further, with the Consumer Price Index (CPI) growing by 2.6 percent on the year in October 2024. While downward adjustments have become less prominent of late, disinflation has been a clear trend as the Federal Reserve (The Fed) aims for its 2.0 percent target. This movement may well be supportive of further interest rate cuts beyond the 50 basis points in September and 25 basis points in November of 2024.

Uncertainty continues to loom over future interest rate decisions, especially with the recent presidential election results. These results could bring numerous policy changes in 2025. While we avoid speculation, Trump has indicative of certain policy proposals and there is a previous administration track record that may lend some insight. One significant proposal from the incoming President-elect is the implementation of tariffs.

Specifically, his incoming administration has indicated an across-the-board tariff on imports, with additional hefty tariffs on China. It is unclear to what extent these tariffs will persuade companies to move production domestically as the wider effect on prices and inflation remains to be seen as well. Additionally, in Trump’s previous term, his administration has prioritized deregulation and tax cuts, which has historically boosted the economy and construction activity. If history is any indication, the industry could anticipate similar economic growth and construction-driven initiatives.

Still, despite more uncertainty looming on the horizon, the US economy remains resilient, with sustained GDP growth and moderated inflation.