It might be time to take a deep breath. There has been a tremendous amount of swirl lately in the economic and political headlines, but I’d like to put a little perspective on today’s business environment and encourage our credit union clients to optimistically plan for the second half of 2024.
Regardless of who we elect as our president, history shows that U.S. presidential elections have had little bearing on the trajectory of the economy and business, regardless of which party wins. Through all 46 presidencies to date, the U.S. economy has continued to grow. While there are some underlying economic macro trends, we agree with most experts supporting a continued decrease in inflation and interest rates, and projections reflecting a strong economy. In fact, The Conference Board recently issued its forecast predicting that GDP growth should pick up later in 2024 as inflation subsides and the Fed first signals and then actually cuts interest rates.
While The Conference Board did reveal that consumer spending decelerated in the first half of the year, prompting GDP to dip, the impact was softened by a continued strong labor market and strength in the stock market. As long as consumers believe their jobs are safe and they can make regular monthly payments easily, they will continue to spend and borrow throughout the remainder of the year.
