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Weekly Market Update

Economic Growth Exceeds Expectations

Throughout 2024, real GDP growth estimates have steadily increased, now surpassing 2.6%. Looking ahead to 2025, growth is projected to remain robust, aligning with historical trend levels of approximately 2%.

5 min read
Head of North American Investment Strategy & Research
Senior Investment Strategist
Investment Strategy & Research Specialist
Fixed Income Portfolio Specialist

Throughout this past year, we have seen consistent upward revisions to the 2024 real GDP forecast, which has underscored the resilience of the US economy. Projections at the start of 2024 stood around 1.2%, reflecting concerns about restrictive monetary policy and global uncertainties. As the year progressed, there has been a steady upward progression to real growth estimates, which has now climbed to over 2.6%! As we look forward to next year 2025, we can see that growth is also expected to remain healthy at around historical trend levels, which is usually considered around 2%.

For 2024, most of the upward revisions have been driven by resilient consumer spending, supported by a strong labor market. Equity markets have reflected this economic strength as incoming data has provided a tailwind to the S&P 500, which is up almost 30% YTD. This impressive market performance is supported by strong corporate earnings which is expected to end the year up 9%. Encouragingly, this economic strength appears to remain solid into 2025, where we’ve also seen GDP growth expectations tick up more recently.

While there are certainly a fair amount of market crosswinds to think about over the coming year, we believe solid economic growth expectations will continue to be a supportive environment for equities. Please see our recently released Global Market Outlook for further insights across a variety of asset classes and themes.

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