, less than a week before the presidential election, but analysts say it remains unclear if positive data can sway inflation-weary voters. Despite spending more, American consumers have been downbeat about their job and financial prospects — meaning that Democrat Kamala Harris still comes out behind Republican Donald Trump in opinion polls about the economy. “If you were to look at numbers like GDP growth or income or consumption, or even employment, you’d say: ‘Gosh, this economy is in pretty good shape,'” said Dan North, senior economist for Allianz Trade North America. “The one thing that completely destroys that narrative is the inflation that consumers have had to deal with,” he told AFP. The world’s biggest economy is anticipated to expand by an annual 3.0 percent rate in the third quarter, according to a market consensus published by Briefing.com. This is the same pace as the April-June period — and US growth this year is due to outpace other advanced economies like Germany, France and the United Kingdom, according to recent International Monetary Fund estimates. Driving growth is again strong consumption, economists say, with business investment providing additional support. But Americans remain pessimistic about their financial bottom line. An October New York Times/Siena College poll of likely voters released last week showed that economic issues remained top-of-mind around two weeks before the election. Those polled were slightly more inclined to trust Trump to do a better job handling the economy, with 52 percent of respondents preferring him to 45 percent support for Harris. North explains that as compared with January 2021, when price increases started ballooning, wages have cumulatively grown 18 percent. But households have had to contend with larger overall upticks on expenses such as food, shelter and gasoline — with cost increases ranging from 22 percent to 29 percent. This is likely the reason that voters feel the economy is doing poorly despite job and wage growth, alongside relatively low unemployment levels. “Does the man on the street care if GDP is 2.8 or 3.1? No, they want to know how the inflation is affecting them,” said North. “It’s been pretty hard to swallow over the past few years.” Workers may have had 17 months of positive real wage growth, but they had 25 months of negative growth prior to that, ZipRecruiter chief economist Julia Pollak noted. With workers accustomed to positive wage growth prior to the coronavirus pandemic, many still feel like their salaries need to catch up, she added. Consumers are also turning to credit cards and dipping into their savings to fund spending, piling pressure especially on lower-income households and younger people. Economists point to higher credit card delinquencies in recent years. Credit card delinquency rates hit a near 12-year high in the first quarter this year, according to a report published in July by the Federal Reserve Bank of Philadelphia. On Wednesday (30), the biggest support to GDP growth will be from consumer spending, with business investment set to “pack another positive punch,” said Oxford Economics deputy chief US economist Michael Pearce. “Election uncertainty could shave some off business investment in the fourth quarter, but the effects are not normally that large,” Pearce told AFP. He added that the GDP growth figure is unlikely to sway the Federal Reserve’s interest rate decision next week. For More Interesting News Follow Us on Instagram){kind=link}
The US financial system is about to report one other quarter of strong development Wednesday (30), lower than per week earlier than the presidential election, however analysts say it stays unclear if constructive knowledge can sway inflation-weary voters.
Regardless of spending extra, American shoppers have been downbeat about their job and monetary prospects — that means that Democrat Kamala Harris nonetheless comes out behind Republican Donald Trump in opinion polls concerning the financial system.
“If you happen to had been to take a look at numbers like GDP development or revenue or consumption, and even employment, you’d say: ‘Gosh, this financial system is in fairly good condition,’” stated Dan North, senior economist for Allianz Commerce North America.
“The one factor that utterly destroys that narrative is the inflation that customers have needed to cope with,” he informed AFP.
The world’s largest financial system is anticipated to broaden by an annual 3.0 % price within the third quarter, in line with a market consensus printed by Briefing.com.
This is identical tempo because the April-June interval — and US development this yr is because of outpace different superior economies like Germany, France and the UK, in line with current Worldwide Financial Fund estimates.
Driving development is once more sturdy consumption, economists say, with enterprise funding offering further help.
However People stay pessimistic about their monetary backside line.
An October New York Occasions/Siena School ballot of seemingly voters launched final week confirmed that financial points remained top-of-mind round two weeks earlier than the election.
These polled had been barely extra inclined to belief Trump to do a greater job dealing with the financial system, with 52 % of respondents preferring him to 45 % help for Harris.
North explains that as in contrast with January 2021, when worth will increase began ballooning, wages have cumulatively grown 18 %.
However households have needed to cope with bigger total upticks on bills corresponding to meals, shelter and gasoline — with value will increase starting from 22 % to 29 %.
That is seemingly the rationale that voters really feel the financial system is doing poorly regardless of job and wage development, alongside comparatively low unemployment ranges.
“Does the person on the road care if GDP is 2.8 or 3.1? No, they wish to understand how the inflation is affecting them,” stated North. “It’s been fairly laborious to swallow over the previous few years.”
Staff might have had 17 months of constructive actual wage development, however they’d 25 months of adverse development previous to that, ZipRecruiter chief economist Julia Pollak famous.
With staff accustomed to constructive wage development previous to the coronavirus pandemic, many nonetheless really feel like their salaries have to catch up, she added.
Customers are additionally turning to bank cards and dipping into their financial savings to fund spending, piling stress particularly on lower-income households and youthful individuals. Economists level to increased bank card delinquencies in recent times.
Bank card delinquency charges hit a close to 12-year excessive within the first quarter this yr, in line with a report printed in July by the Federal Reserve Financial institution of Philadelphia.
On Wednesday (30), the most important help to GDP development can be from client spending, with enterprise funding set to “pack one other constructive punch,” stated Oxford Economics deputy chief US economist Michael Pearce.
“Election uncertainty may shave some off enterprise funding within the fourth quarter, however the results usually are not usually that giant,” Pearce informed AFP.
He added that the GDP development determine is unlikely to sway the Federal Reserve’s rate of interest resolution subsequent week.
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