The U.S. economy experienced a notable growth spurt, with a revised annualized rate of 3.1% in the third quarter of 2024, an increase from the earlier estimate of 2.8%.

This growth was primarily fueled by robust consumer spending, which expanded at a rate of 3.7%, marking the fastest pace since early 2023.

Despite these positive indicators, the unemployment rate currently stands at 4.2%, up from a record low of 3.4% earlier in the year, and inflation remains a concern after peaking at 9.1% in mid-2022.

The Federal Reserve's preferred inflation measure, the personal consumption expenditures index, showed improvement, rising at an annual rate of 1.5%, down from 2.5% previously.

Federal government spending surged by 8.9%, driven largely by a significant increase in defense spending, which rose by 13.9%.

Exports also played a significant role in this economic expansion, increasing by 9.6%, particularly in capital goods, which contributed to the overall growth.

As President-elect Donald Trump prepares to take office, he has promised significant economic policy changes, including tax cuts and tariffs, which have raised concerns among economists about potential inflationary impacts.

Despite the positive economic indicators, dissatisfaction among American voters regarding inflation has led to Trump's return to the White House alongside Republican majorities in Congress.

Eswar Prasad from Cornell University cautioned that while the current growth is promising, sustainability may be challenged as other countries face economic difficulties that could limit their ability to purchase U.S. goods.

Fixed investment exceeded expectations, rising by 2.1%, while the foreign component's negative impact on growth was revised down, indicating a more favorable economic outlook.

Overall, the latest GDP figures suggest a robust U.S. economy with a promising outlook, although challenges remain on the horizon.

The Federal Reserve recently implemented its third consecutive rate cut, lowering the policy rate to a range of 4.25%-4.50%, while projecting fewer cuts than previously anticipated for the upcoming year.