Back to Reports

Macro Flash Report

GDP & FOMC Summary of Economic Projections

Takeaway: Final 3Q24 GDP (3rd Revision) came in above expectations, signaling continued strength of the consumer. This comes after yesterday’s FOMC meeting where Fed officials revised their expectations for growth and inflation to be higher in 2025, along with stable employment and less interest rate cuts than their September projection.

The third and final revision for Q3 2024 GDP show that the economy grew at an annualized rate of 3.1%, up from 3.0% in Q2 and better than the second estimate of 2.8%, marking the highest growth rate so far this year. This boost was primarily driven by resilient consumer spending, with personal spending increasing at the fastest pace since Q1 2023.

Furthermore, the Summary of Economics Projections (SEP), released yesterday along with the 25-basis point interest rate cut, showed no slowdown for the broader economy in 2025:

  • Stronger Growth: GDP up to 1% from 2% in September.
  • Better Labor Conditions: Unemployment down to 3% from 4.4% in September.
  • Persistent and Stubborn Underlying Inflation: Core PCE cooling more slowly at 5% from 2.2% in September.
  • Strong Increases in Food and Energy Costs: PCE increasing to 5% from 2.1%.

Additionally, the median dot plot forecast showed 2 less cuts in 2025, and 2 less cuts in 2026. More notably, in 5 consecutive meetings, the long-run expectations for the neutral rate have gradually increased, now up to 3%.