Economics
State of the U.S. Economy Heading into 2025
Report summary
While the U.S. economy is likely to finish 2024 strong, headwinds threaten the economy outlook
The U.S. labor market continues to cool primarily through slower hiring and dampened wages as employment levels remain fairly robust. Savings have diminished for consumers of all income levels from their pandemic highs but have increased for higher earning adults in the past year. As inflation is near the Federal Reserve’s target, housing costs are the main hurdle in claiming victory. Consumers are increasingly sensitive to higher prices, employing cost saving measures where possible. Consumer demand has been muted through most of 2024 compared to previous year but is trending upwards as the year comes to a close.
Key Takeaways
- A cooling labor market, diminished savings, and weaker demand present downward risks for the U.S. economy.
- Historically low unemployment, easing inflation, thriving high-income consumers, and improving sentiment keep the economy strong.
- Economic strength in 2025 largely hinges on If the Fed can achieve its “soft landing.”
Methodology
Morning Consult data featured in this report draws from monthly, weekly, and daily surveys. All survey interviews were conducted online, and the data were weighted to approximate populations of adults based on age, gender, race, educational attainment, region, gender by age and race by educational attainment.
Underlying data for this report can be accessed and downloaded at the associated tracker pages:
About the author
Sofia Baig is an economist at decision intelligence company Morning Consult, where she works on descriptive and predictive analysis that leverages Morning Consult’s proprietary high-frequency data. Previously, she worked for the Federal Reserve Board as a quantitative analyst, focusing on topics related to monetary policy and bank stress testing. She received a bachelor’s degree in economics from Pomona College and a master’s degree in mathematics and statistics from Georgetown University.
Follow her on Twitter @_SofiaBaig_For speaking opportunities and booking requests, please email [email protected]
