Economics
State of the U.S. Economy: The Economy is Shifting Toward Neutral. What’s Next?
Report summary
Consumer demand looks poised for further cooling over the second half of 2024
Following several years of volatility brought on by the pandemic, stimulus, historically high inflation and a rapid rise in interest rates, the U.S. economy is shifting into neutral by many measures. The labor market is cooling, price pressures are dissipating, and U.S. consumers’ willingness to splurge is looking increasingly tapped out. While Morning Consult’s data shows little sign of an imminent collapse, evidence is mounting that the backbone of economic growth—consumer demand—is poised for further softening over the second half of 2024.
Key Takeaways
- Low unemployment continues to support household finances, but the labor market is showing signs of slowing momentum. Wage pressures are diminishing as well, leading to slower income growth even as the elevated cost of living props up monthly expenses.
- Inflation has cooled substantially over the past two years, aligning with fewer consumers feeling surprised by high price tags. Nevertheless, U.S. adults remain highly price conscious amid the elevated cost of living, with purchasing demand continuing to be dented by cost-cutting measures.
- U.S. consumers are losing their appetite for splurging, and have been de-prioritizing discretionary spending for both goods and services in recent months. Looking ahead, Morning Consult’s data suggests weakening consumer demand may continue over the second half of this year.
Methodology
Morning Consult data featured in this report draws from monthly, weekly, and daily surveys. All survey interviews were conducted online, and the data were weighted to approximate populations of adults based on age, gender, race, educational attainment, region, gender by age and race by educational attainment.
Underlying data for this report can be accessed and downloaded at the associated tracker pages:
About the author
Kayla Bruun is the lead economist at decision intelligence company Morning Consult, where she works on descriptive and predictive analysis that leverages Morning Consult’s proprietary high-frequency economic data. Prior to joining Morning Consult, Kayla was a key member of the corporate strategy team at telecommunications company SES, where she produced market intelligence and industry analysis of mobility markets.
Kayla also served as an economist at IHS Markit, where she covered global services industries, provided price forecasts, produced written analyses and served as a subject-matter expert on client-facing consulting projects. Kayla earned a bachelor’s degree in economics from Emory University and an MBA with a certificate in nonmarket strategy from Georgetown University’s McDonough School of Business. For speaking opportunities and booking requests, please email [email protected]
