US Economic Resilience to Guide Global Market in Ending Fiscal Uncertainty 

The health of the American economy is increasingly seen as a bellwether for the global economy as the performance of other countries has been not satisfactory partly due to the globalization factor.

The fact that the world's largest economy is making gains in the market is encouraging news for other economies. Riding partly on consumer spending and some forms of investment, the US economy accelerated to a 2.4 percent annual growth rate between April and June this year. The growth rate during the second quarter proved all the economists and analysts wrong who were not bullish about the US economy. 

The latest statistics match President Joe Biden's administration's words that U.S. economic progress is strengthening. The Commerce Department on Thursday announced that US GDP has increased by 2.4 percent in the second quarter of this year. The recent statements by the Federal Reserve economists of the U.S. Central Bank and the U.S Congress Budget Office that their country will not be trapped in a recession this year have been validated. 

With the US economy showing resilience in the face of inflation, the job market is steadily growing. The US economy brought down the unemployment rate to 3.5% while creating 1,87,000 new jobs in July. However, there are not enough people with the skills and experience that employers are looking for.
 
According to a well-known accounting firm RSM US LLP the 'resistance' of surviving financial setbacks is apparent in the US economy. The firm’s chief economist Joe Brusuelas says the growth of the US economy is good news for financial markets and the public. 

During the second quarter, economists interviewed by prominent economic media companies like Bloomberg and Wall Street Journal predicted that GDP, which serves as a mirror to the health of the economy, will see a 1.5% growth rate. Contrary to the prediction, the economy accelerating to 2.4% has brought joy to the Democrats and the American people.

The US Commerce Department released details of the second quarter GDP estimates the day after Federal Reserve Chairman Jerome Powell announced that it is unlikely to face a U.S. recession this year.  The interesting fact here is that the Fed raised interest rates (25 basis points) on Wednesday. This is the 11th time interest rates have been increased since March 2022. Surprisingly, interest rates have been raised dozens of times in the last 20 years to contain inflation. 

The annual inflation rate reached three percent in June. However, the US government announced this month that it will be the lowest since March 2021. David Merrickle, the chief  economist at the Goldman Sachs research firm, says inflation will improve by the 2023 binary for a number of reasons. 

-------- Vijayasai Reddy, YSRCP MP, Rajya Sabha