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Business Confidence Could Drive Growth Higher

January 29, 2025

 

A resilient consumer has in recent years driven U.S. economic growth despite slowing business investment.

 

However, since President Trump won the election, expectations for potential business-friendly policies, such as tariffs on imports, a lower corporate tax rate and less regulation, have boosted small business confidence. Given that improving business confidence is highly correlated with the level of investment in critical areas such as factories and technology, a rebound could affect overall economic growth in a material way.

 

Our outlook on U.S. GDP growth remains positive for 2025, especially because we continue to expect robust consumer spending to persist, driven by a strong enough labor market and healthy balance sheets. We expect U.S. growth for 2025 to range from 1.5% to 2.5%, in line with trend growth, but a recovery in investment could lift growth even higher. 

 

 

 

 

 

 

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