Atlanta Fed Projects 3.2% GDP Growth in Q3 2024 Amid Surging US Productivity and Innovation
October 22, 2024The Atlanta Fed’s GDPNow model forecasts a robust 3.2% annual GDP growth rate for the third quarter of 2024, indicating ongoing economic strength.
In 2024, the US economy and job growth have demonstrated surprising resilience, with real GDP rising approximately 3% year-over-year in the first half.
Labor productivity in the US has grown 3% year-over-year in the first half of 2024, marking a significant recovery from a decline in early 2022.
Overall, labor productivity has increased nearly three percent over the past year, significantly surpassing the postwar average.
The fluid labor market in the US enhances productivity through better skill matching and frequent job changes.
The US consistently invests heavily in both physical and intangible capital, with non-residential investment around 17% of GDP since the mid-1990s.
As the US accounts for over half of global private-sector investment in AI, it showcases its strength as an innovation engine.
DARPA is actively funding AI projects that enhance technology's role across various sectors, contributing to future productivity.
The less restrictive regulatory environment in the US facilitates the growth of tech companies, further bolstering innovation.
Despite positive trends, there are concerns that disinflation progress could stall, potentially leading the Federal Reserve to maintain higher interest rates longer than expected.
Investors can anticipate a robust market outlook due to stronger economic growth, stable labor markets, and improving productivity.
Analysts have mixed predictions regarding the long-term impact of AI on productivity, with some optimistic about significant improvements.
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