The U.S. economy grew at a healthy 3% annual rate as of the latest Q2 GDP report. However, as the Federal Reserve signals that interest rate cuts are likely, what are the risks? A 2024 recession is generally seen as unlikely, but metrics that economics take seriously hint that a recession could occur, perhaps in 2025.
What Would Happen If the U.S. Economy Were to Collapse? If the U.S. economy were to collapse, you would likely lose access to credit. Banks would close. Demand would outstrip the supply of food, gas, and other necessities.
The state of the U.S. economy is strong despite inflation remaining elevated. The economy is expanding at a crisp pace, the labor market is loosening slightly and inflation is slowing from its peak.
“The US economy is in a good place,” writes David Mericle, chief US economist in Goldman Sachs Research. “Recession fears have diminished, inflation is trending back toward 2%, and the labor market has rebalanced but remains strong.” Goldman Sachs Research predicts US GDP will grow 2.5% on a full-year basis.
The level of debt as a percent of after-tax income is the highest ever measured in our history. Mortgage and consumer debt is now 120% of after-tax income, more than twice the level of 30 years ago. The debt-service ratio (the percent of after-tax income that goes to pay off debts) is at an all-time high of 13.9%.
Despite occasional challenges and concerns, the likelihood of the U.S. dollar collapsing is considered to be extremely low, given its strong global position and the underlying strength of the U.S. economy.
The positive economic situation he inherited from the Obama administration continued, with a labor market approaching full employment and measures of household income and wealth continuing to improve further into record territory. Trump also implemented trade protectionism via tariffs, primarily on imports from China.
For 2025, we do expect the level of economic growth to slow but remain strong and on trend with historical averages. The Organisation for Economic Co-operation and Development (OECD) is predicting 2.4 percent economic growth for the U.S. for 2025.
Your mortgage payments could change drastically because of a collapsing dollar, especially if you have an adjustable rate. Those interest rates would follow the trend of the economy itself, so if the Fed raises interest rates, mortgage rates will also climb. This would lead to volatility in your mortgage payments.
Factories were shut down, farms and homes were lost to foreclosure, mills and mines were abandoned, and people went hungry. The resulting lower incomes meant the further inability of the people to spend or to save their way out of the crisis, thus perpetuating the economic slowdown in a seemingly never-ending cycle.
Typically, in recessions, the demand for houses declines and as a result house prices will fall. This was the case in the last recession back in 2008 when the housing bubble burst and the recession began.
Tax strategy, interest rates and your investments. The U.S. economy appears on track to produce annual growth above 2% in 2024. Solid consumer spending helped keep the economy growing. Questions remain about lies ahead for economic growth, inflation and interest rates in 2025.
Lasting from December 2007 to June 2009, this economic downturn was the longest since World War II. The Great Recession began in December 2007 and ended in June 2009, which makes it the longest recession since World War II. Beyond its duration, the Great Recession was notably severe in several respects.
Overall, in the calendar year 2024, the United States' Nominal GDP at Current Prices totaled at $29.017 trillion, as compared to $25.744 trillion in 2022. The three U.S. states with the highest GDPs were California ($4.080 trillion), Texas ($2.695 trillion), and New York ($2.284 trillion).
The U.S. ranks among the world's highest in economic competitiveness, productivity, innovation, human rights, and higher education.
The first year of the Biden presidency (2021) saw strong growth in real GDP, wages, employment, stock market returns, and household net worth, coupled with an increase in inflation, as the economy recovered from the pandemic recession of 2020. During 2022–2023, the unemployment rate averaged 3.6%.
The GDP bottom, or trough, was reached in the second quarter of 2009 (marking the technical end of the recession that is defined by "a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and ...
Trump's campaign issues included: implementing anti-immigrant policies and a massive deportation operation against legal and illegal immigrants; pursuing an isolationist "America First" foreign policy agenda; repealing and replacing the Affordable Care Act; pursuing a climate change denial and anti-clean energy ...
But that begs a critical question: What would replace the dollar? Some say it will be the euro; others, perhaps the Japanese yen or China's renminbi. And some call for a new world reserve currency, possibly based on the IMF's Special Drawing Right or SDR, a reserve asset.
Nations worldwide are seeking alternatives to the US dollar, with examples being China and Russia trading in their own currencies, and countries like India, Kenya and Malaysia advocating for de-dollarization or signing agreements with other nations to trade in local currencies or alternative benchmarks.
1. Kuwaiti dinar. The Kuwaiti dinar (KWD) is the world's strongest currency, and this is for a number of reasons. For starters, Kuwait has one of the largest oil reserves in the world.