US Economy Surges But Faces Future Challenges

The US economy shows resilience with a notable reduction in jobless claims and stronger-than-expected GDP growth driven by consumer spending. Despite the Federal Reserve's recent interest rate cut, challenges lie ahead in 2025 due to potential policy uncertainties.

In a surprising turn, recent data reveals the US economy is showing remarkable resilience. Last week saw a significant drop in new applications for jobless benefits, falling by 22,000 to 220,000, surpassing economist predictions.

The Federal Reserve's recent third consecutive interest rate cut underscores the economy's vitality, even as the central bank projects only two rate reductions in 2025 amidst lingering inflation concerns. Chair Jerome Powell expressed optimism about the diminishing risks in the labor market.

Despite the current economic momentum, experts, like Nationwide's Oren Klachkin, caution about the forthcoming challenges in 2025 related to policy uncertainties. However, bolstered by robust consumer spending, the third-quarter GDP growth exceeded expectations with an upward revision to 3.1%.

(With inputs from agencies.)