US Economic Growth Faces Headwinds: S&P Global Market Intelligence Report

A report by S&P Global Market Intelligence forecasts a decline in US GDP growth over the next three years, dropping from 2.8% in 2024 to 1.6% in 2027. Key factors include harsh winter weather, federal layoffs, and rising tariffs, along with potential inflation challenges and stagnant interest rates.

The latest forecast from S&P Global Market Intelligence paints a challenging picture for the US economy, projecting a steady decline in GDP growth over the forthcoming years. The report anticipates growth rates to dip from 2.8% in 2024 to just 1.6% by 2027.

According to the report, the deceleration in growth can be attributed to several factors, including harsh winter weather that reduced first-quarter growth projections for personal consumption expenditures (PCE) by 1.1 percentage points. Moreover, expected layoffs within the federal workforce are set to depress the GDP growth in the second quarter by 0.3 percentage points.

Tariff policies are also playing a role; import tariffs from China, which currently stand at 30%, are expected to rise to 45% by June, with additional tariffs anticipated for Canada and Mexico. The report also highlights ongoing concerns about inflation and predicts that the Federal Reserve may hold interest rates steady until the end of 2025 to support economic stability amidst these challenges.

(With inputs from agencies.)