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US Economy 2024: Key Points to Know – Will It Rise or Face a Downfall?

US Economy 2024 Key Points to Know - Will It Rise or Face a Downfall

US Economy 2024: According to Kevin Kliesen, a business economist and research officer at the Federal Reserve Bank of St. Louis, economic conditions are supposed to deteriorate modestly by 2024.

However, real GDP growth and job growth are expected to remain positive, and inflation will go down to around 2.5%. Having such an outcome would validate those who’ve long believed a soft landing is possible.”

Fed policy is expected to shift from the rapid rise in interest rates that characterized the last 18 months, as the central bank hinted at in its December meeting. Meanwhile, inflation is predicted to slow down in 2024 after a surge in 2022.

That’s not to say economists think inflation and interest rates will go back to pre-pandemic levels.

The interest rate will stay above inflation, says Andrew Patterson, senior international economist at Vanguard. There’s no going back to ultra-low interest rates. We’re more convinced than we were a year ago.”

In other words, savers will get rewarded for their prudence, and long-term investing could return after a few years of momentum stocks. We’ll be living in a sound money era for a while, with savers earning positive real returns and borrowers weighing capital costs carefully.”

For most Americans, inflation will moderate in 2024. Consumer prices spiked to 9% inflation in mid-2022, then fell to around 3% and are expected to drop further next year to the mid-2% range or lower.

Prices will still rise, but at a rate more in line with pre-pandemic levels. Even if interest rates settle at a higher level than before COVID-19, they’re on the downward trajectory.

“We expect a strong expansion with robust employment and falling inflation, but we’re expecting a modest expansion near 1%,” said RSM US economists.

The key question in gauging the US economy 2024 is if something similar to 2008 will happen again. Although the commercial real estate market and regional banks are having serious problems that could lead to a credit crunch, the Fed sticks to its high interest rate mantra to keep inflation under control.

Meanwhile, Jerome Powell’s press conferences and Fed policy statements don’t mention the financial system’s risks to the economy.

The US economy 2024 will be just as unpredictable as the one in 2023.

How’s the US economy 2024 and job growth looking? Here’s what’s going on with inflation and interest rates

Post-COVID-19, the US economy was supposed to finally fall into recession this year.

Stocks are roaring thanks to the growing belief that the Federal Reserve will manage inflation without causing a downturn, known as a “soft landing.”

Growth is expected to slow amid the Fed’s aggressive interest rate hikes, household savings being depleted from the pandemic, and government spending cutting back.

Inflation is likely to ease further to or near the Fed’s 2% goal, and the central bank is tentatively planning to cut interest rates more sharply than expected, forecasters say.

The year 2023 was a good one, says Moody’s Analytics’ Mark Zandi. “2024’s going to be great.”

Are interest rates going to go down in 2024?

Recent developments have brightened the outlook. Probably done raising rates to fight inflation, the Fed plans three rate cuts in 2024 to lower borrowing costs for consumers and businesses. Fed’s turnabout has been validated by lower inflation than expected.

The stock market soared higher after the Fed’s pivot, which was already surging because of an improved inflation picture.

“Like pouring gasoline on a fire,” Scott Anderson, BMO’s chief economist, said.

What’s the economy like in 2024?

According to a survey by Wolters Kluwer Blue Chip Economic Indicators, economists predict the economy will grow 1.3% this year, down from 2.4% in 2023. The Fed’s further cuts to interest rates should lead to stronger output by fall as the first half of the year ends.

By the end of 2024, unemployment is projected to rise to 4.2%, well below economists’ 4.8% estimate a year ago.

Wolters Kluwer poll was done in early December before Fed news on Dec. 13.

There have been some revisions to top economists’ estimates since then. Moody, chief economist at Regions Financial, bumped up his GDP growth forecast to 1.9% from 1.6%. But Zandi said he always believed inflation would decline and the Fed would shift its stance.

Just under 2% GDP growth isn’t robust, but it’s close to the decent 2% average in the decade before the pandemic. Companies will lower prices and employees will accept smaller pay raises if the US economy 2024 cools dramatically.

As monetary policy takes a toll and post-pandemic tailwinds fade, growth will slow in 2024.

Real GDP growth should be somewhere between an expansion and contraction for much of next year, also known as a soft landing. We forecast a below-trend 0.7% real GDP growth in 2024 after a 2.8% growth in 2023.

In 2023, consumer spending could rise at a slower pace, while fiscal spending could go from a positive contributor to a modest drag. Business investment and housing activity dropped in 2023, but the outlook for 2024 remains muted amid higher interest rates; 2023 services strength will weaken.

Since the hiking cycle is over, we’ll leave the Fed Funds rate at 5.25%-5.50% until mid-2024.

Inflation is likely to moderate over the next few quarters, so we expect the FOMC to slowly normalize policy rates. Starting in June, we predict 25 bps cuts, bringing the Fed Funds target range to 4.00%-4.25% by 2024.

The Fed’s balance sheet runoff program, quantitative tightening, will also continue through 2024. Quantitative tightening is expected to drain $1 trillion from the economy next year at $95 billion a month.

During the past 18 months, housing activity has dropped 30%-40%.

The U.S. housing market is effectively frozen with housing affordability at a 40-year low, and 75% of mortgages locked at 4% or below. Residential real estate investment has fallen 12% seasonally adjusted over the last six quarters.

While supply was tight and vacancies were at historically low levels, home values rose 6% in 2023. Even if trends remain soft in the near term, we think the housing market could perform better in 2024 than in 2023, given the already huge drop in recent years.

The risks are there for a moderately positive forecast for 2024. Most people were surprised by the U.S. economy in 2023. It will be interesting to see how the US economy 2024 performs.

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Google’s Search Dominance Is Unwinding, But Still Accounting 48% Search Revenue

Google

Google is so closely associated with its key product that its name is a verb that signifies “search.” However, Google’s dominance in that sector is dwindling.

According to eMarketer, Google will lose control of the US search industry for the first time in decades next year.

Google will remain the dominant search player, accounting for 48% of American search advertising revenue. And, remarkably, Google is still increasing its sales in the field, despite being the dominating player in search since the early days of the George W. Bush administration. However, Amazon is growing at a quicker rate.

google

Google’s Search Dominance Is Unwinding

Amazon will hold over a quarter of US search ad dollars next year, rising to 27% by 2026, while Google will fall even more, according to eMarketer.

The Wall Street Journal was first to report on the forecast.

Lest you think you’ll have to switch to Bing or Yahoo, this isn’t the end of Google or anything really near.

Google is the fourth-most valued public firm in the world. Its market worth is $2.1 trillion, trailing just Apple, Microsoft, and the AI chip darling Nvidia. It also maintains its dominance in other industries, such as display advertisements, where it dominates alongside Facebook’s parent firm Meta, and video ads on YouTube.

To put those “other” firms in context, each is worth more than Delta Air Lines’ total market value. So, yeah, Google is not going anywhere.

Nonetheless, Google faces numerous dangers to its operations, particularly from antitrust regulators.

On Monday, a federal judge in San Francisco ruled that Google must open up its Google Play Store to competitors, dealing a significant blow to the firm in its long-running battle with Fortnite creator Epic Games. Google announced that it would appeal the verdict.

In August, a federal judge ruled that Google has an illegal monopoly on search. That verdict could lead to the dissolution of the company’s search operation. Another antitrust lawsuit filed last month accuses Google of abusing its dominance in the online advertising business.

Meanwhile, European regulators have compelled Google to follow tough new standards, which have resulted in multiple $1 billion-plus fines.

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Pixa Bay

Google’s Search Dominance Is Unwinding

On top of that, the marketplace is becoming more difficult on its own.

TikTok, the fastest-growing social network, is expanding into the search market. And Amazon has accomplished something few other digital titans have done to date: it has established a habit.

When you want to buy anything, you usually go to Amazon, not Google. Amazon then buys adverts to push companies’ products to the top of your search results, increasing sales and earning Amazon a greater portion of the revenue. According to eMarketer, it is expected to generate $27.8 billion in search revenue in the United States next year, trailing only Google’s $62.9 billion total.

And then there’s AI, the technology that (supposedly) will change everything.

Why search in stilted language for “kendall jenner why bad bunny breakup” or “police moving violation driver rights no stop sign” when you can just ask OpenAI’s ChatGPT, “What’s going on with Kendall Jenner and Bad Bunny?” in “I need help fighting a moving violation involving a stop sign that wasn’t visible.” Google is working on exactly this technology with its Gemini product, but its success is far from guaranteed, especially with Apple collaborating with OpenAI and other businesses rapidly joining the market.

A Google spokeswoman referred to a blog post from last week in which the company unveiled ads in its AI overviews (the AI-generated text that appears at the top of search results). It’s Google’s way of expressing its ability to profit on a changing marketplace while retaining its business, even as its consumers steadily transition to ask-and-answer AI and away from search.

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Google has long used a single catchphrase to defend itself against opponents who claim it is a monopoly abusing its power: competition is only a click away. Until recently, that seemed comically obtuse. Really? We are going to switch to Bing? Or Duck Duck Go? Give me a break.

But today, it feels more like reality.

Google is in no danger of disappearing. However, every highly dominating company faces some type of reckoning over time. GE, a Dow mainstay for more than a century, was broken up last year and is now a shell of its previous dominance. Sears declared bankruptcy in 2022 and is virtually out of business. US Steel, long the foundation of American manufacturing, is attempting to sell itself to a Japanese corporation.

Could we remember Google in the same way that we remember Yahoo or Ask Jeeves in decades? These next few years could be significant.

SOURCE | CNN

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2024 | Supreme Court Won’t Hear Appeal From Elon Musk’s X Platform Over Warrant In Trump Case

trump

Washington — Trump Media,  The Supreme Court announced Monday that it will not hear an appeal from social media platform X about a search warrant acquired by prosecutors in the election meddling case against former President Donald Trump.

The justices did not explain their rationale, and there were no recorded dissents.

The firm, which was known as Twitter before being purchased by billionaire Elon Musk, claims a nondisclosure order that prevented it from informing Trump about the warrant obtained by special counsel Jack Smith’s team violated its First Amendment rights.

The business also claims Trump should have had an opportunity to exercise executive privilege. If not reined in, the government may employ similar tactics to intercept additional privileged communications, their lawyers contended.

trump

Supreme Court Won’t Hear Appeal From Elon Musk’s X Platform Over Warrant In Trump Case

Two neutral electronic privacy groups also joined in, urging the high court to hear the case on First Amendment grounds.

Prosecutors, however, claim that the corporation never shown that Trump utilized the account for official purposes, therefore executive privilege is not a problem. A lower court also determined that informing Trump could have compromised the current probe.

trump

Trump utilized his Twitter account in the weeks preceding up to his supporters’ attack on the Capitol on January 6, 2021, to spread false assertions about the election, which prosecutors claim were intended to create doubt in the democratic process.

The indictment describes how Trump used his Twitter account to encourage his followers to travel to Washington on Jan. 6, pressuring Vice President Mike Pence to reject the certification, and falsely claiming that the Capitol crowd, which battered police officers and destroyed glass, was peaceful.

musk trump

Supreme Court Won’t Hear Appeal From Elon Musk’s X Platform Over Warrant In Trump Case

That case is now moving forward following the Supreme Court’s verdict in July, which granted Trump full immunity from criminal prosecution as a former president.

The warrant arrived at Twitter amid quick changes implemented by Musk, who bought the company in 2022 and has since cut off most of its workforce, including those dedicated to combating disinformation and hate speech.

He also welcomed back a vast list of previously banned users, including Trump, and endorsed him for the 2024 presidential election.

SOURCE | AP

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The Supreme Court Turns Down Biden’s Government Appeal in a Texas Emergency Abortion Matter.

Supreme Court

(VOR News) – A ruling that prohibits emergency abortions that contravene the Supreme Court law in the state of Texas, which has one of the most stringent abortion restrictions in the country, has been upheld by the Supreme Court of the United States. The United States Supreme Court upheld this decision.

The justices did not provide any specifics regarding the underlying reasons for their decision to uphold an order from a lower court that declared hospitals cannot be legally obligated to administer abortions if doing so would violate the law in the state of Texas.

Institutions are not required to perform abortions, as stipulated in the decree. The common populace did not investigate any opposing viewpoints. The decision was made just weeks before a presidential election that brought abortion to the forefront of the political agenda.

This decision follows the 2022 Supreme Court ruling that ended abortion nationwide.

In response to a request from the administration of Vice President Joe Biden to overturn the lower court’s decision, the justices expressed their disapproval.

The government contends that hospitals are obligated to perform abortions in compliance with federal legislation when the health or life of an expectant patient is in an exceedingly precarious condition.

This is the case in regions where the procedure is prohibited. The difficulty hospitals in Texas and other states are experiencing in determining whether or not routine care could be in violation of stringent state laws that prohibit abortion has resulted in an increase in the number of complaints concerning pregnant women who are experiencing medical distress being turned away from emergency rooms.

The administration cited the Supreme Court’s ruling in a case that bore a striking resemblance to the one that was presented to it in Idaho at the beginning of the year. The justices took a limited decision in that case to allow the continuation of emergency abortions without interruption while a lawsuit was still being heard.

In contrast, Texas has been a vocal proponent of the injunction’s continued enforcement. Texas has argued that its circumstances are distinct from those of Idaho, as the state does have an exemption for situations that pose a significant hazard to the health of an expectant patient.

According to the state, the discrepancy is the result of this exemption. The state of Idaho had a provision that safeguarded a woman’s life when the issue was first broached; however, it did not include protection for her health.

Certified medical practitioners are not obligated to wait until a woman’s life is in imminent peril before they are legally permitted to perform an abortion, as determined by the state supreme court.

The state of Texas highlighted this to the Supreme Court.

Nevertheless, medical professionals have criticized the Texas statute as being perilously ambiguous, and a medical board has declined to provide a list of all the disorders that are eligible for an exception. Furthermore, the statute has been criticized for its hazardous ambiguity.

For an extended period, termination of pregnancies has been a standard procedure in medical treatment for individuals who have been experiencing significant issues. It is implemented in this manner to prevent catastrophic outcomes, such as sepsis, organ failure, and other severe scenarios.

Nevertheless, medical professionals and hospitals in Texas and other states with strict abortion laws have noted that it is uncertain whether or not these terminations could be in violation of abortion prohibitions that include the possibility of a prison sentence. This is the case in regions where abortion prohibitions are exceedingly restrictive.

Following the Supreme Court’s decision to overturn Roe v. Wade, which resulted in restrictions on the rights of women to have abortions in several Republican-ruled states, the Texas case was revisited in 2022.

As per the orders that were disclosed by the administration of Vice President Joe Biden, hospitals are still required to provide abortions in cases that are classified as dire emergency.

As stipulated in a piece of health care legislation, the majority of hospitals are obligated to provide medical assistance to patients who are experiencing medical distress. This is in accordance with the law.

The state of Texas maintained that hospitals should not be obligated to provide abortions throughout the litigation, as doing so would violate the state’s constitutional prohibition on abortions. In its January judgment, the 5th United States Circuit Court of Appeals concurred with the state and acknowledged that the administration had exceeded its authority.

SOURCE: AP

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Could Last-Minute Surprises Derail Kamala Harris’ Campaign? “Nostradamus” Explains the US Poll.

Scientists Awarded MicroRNA The Nobel Prize in Medicine.

US Inflation will Comfort a Fed Focused on Labor Markets.

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