Strength in the U.S. Economy Fuels Optimistic Expectations
05:05 10/10/2024 - PesoMXN.com
The economy in the United States continues to show strength, and analysts believe it will experience a “soft landing” after a period marked by high inflation and elevated interest rates. According to Carlos Serrano, chief economist at BBVA, “we will be able to keep inflation in check without falling into a recession, and the U.S. economy continues to demonstrate resilience.”
The bank forecasts that U.S. GDP will grow by 2.5% this year and by 2.1% in 2025. “We are likely to start seeing a gradual slowdown without facing a recession,” he added. Employment rates have shown a downward trend, which the economist attributes to adjustments in the market. This slowdown in employment primarily originates in the manufacturing sector, which has negatively impacted Mexico's exports, although consumption, especially of non-durable goods, is performing well. “This undoubtedly reflects the strong state of the labor market: people feel confident to spend as long as they have faith in their jobs and see increases in their wages,” commented Axel Christensen, head of Investment Strategy for Latin America at BlackRock. In the labor market, the four-week average of initial unemployment claims continues to decline. Christensen also emphasized that while most sectors and regions of the U.S. are making good progress, some areas need to be monitored more closely, such as the construction sector, which is highly sensitive to Federal Reserve interest rates. For Carlos Serrano, the strong performance in U.S. employment can be attributed to two factors: a significant wave of immigration in the post-pandemic period and the return of workers following the Covid crisis.
In my opinion, despite the challenges facing the global economy, projections for the U.S. are encouraging. It is vital for Mexico to closely monitor these developments, as the performance of the U.S. economy has a direct impact on its exports and the local labor market. Adapting and adjusting strategies could be key to capitalizing on opportunities that arise in this economic environment.
