The U.S. economy has reached an enviable milestone, with recent data confirming that it's not only steady but surpassing expectations as it enters a phase of low inflation alongside strong employment figures. According to the Federal Reserve's preferred Personal Consumption Expenditures (PCE) Price Index, core inflation dropped to 2.2% in the third quarter, aligning with the Fed’s long-term target for price stability.
At the same time, the economy’s growth has been solid. The U.S. GDP grew at an impressive 2.8% rate, further pushing real GDP above pre-pandemic forecasts, and unemployment is steady at 4.1%—a combination that many economists see as a sweet spot for sustainable growth. This indicates that the economy isn't just recovering from pandemic lows; it’s outperforming predictions set before COVID-19 disrupted global markets. These numbers mark the first post-pandemic period where a major economy has achieved both low inflation and high employment—considered an optimal economic scenario.
This recovery has taken time to solidify, but the current data shows that the U.S. economy has moved beyond stabilization to genuine growth, outperforming forecasts from just a few years ago. When energy and food costs are included, inflation rests even lower, at 1.5%, highlighting the stability of price levels across essential and discretionary expenses alike. The economy’s resilience is marked by robust growth across sectors and healthy consumer spending, painting a picture of a stable yet dynamic marketplace. This performance has positioned the U.S. as a leader among major economies.
Yet, there are looming risks to this economic balance. Former President Donald Trump’s renewed campaign promises on tariffs and immigration restrictions have raised concerns about the potential disruption to trade and labor markets. Analysts suggest that if Trump were to win the 2024 election and moderate some of his more extreme policy proposals, focusing instead on tax cuts, he might sustain current growth levels and claim credit for the robust economy, much as he did during his first term. But, with the economy performing so well, there’s limited room for further improvement and considerable potential for setbacks.
Business leaders are also cautious. Elon Musk recently hinted at potential “short-term hardship” on the horizon, reflecting broader concerns within the private sector about potential volatility. But with a GDP surpassing expectations and inflation under control, many analysts emphasize that the economy’s positive trajectory is likely to continue, especially if policy choices support existing growth.
While the debate over economic stewardship continues, proponents of significant fiscal intervention are celebrating the current numbers as validation for their approach. The economy, they argue, isn’t just stable—it’s thriving. As the U.S. enjoys a moment of low inflation, full employment, and growth that exceeds expectations, the challenge now lies in sustaining this balance amid potential political and environmental shocks.
The U.S. economy stands as a rare example of post-pandemic recovery that has not only restored but outpaced previous benchmarks. For now, the country finds itself enjoying steady growth with inflation and unemployment both low—achievements that underscore just how robust and resilient the economy has become in the face of past challenges.