Hardwood Floors December 2024/January 2025

INDUSTRY INSIGHTS

MARKET MATTERS

STRENGTHS AND THREATS TO THE ECONOMY

USTRY INSIGHTS RKET MATTERS engths and Threats to the Economy Santo Torcivia ages = stock of showing inflation arrows, money]

U.S. real gross domestic product (GDP) growth will slow in 2024 and match the prior year's wth. Economic growth is forecasted to fall slightly in 2025 and remain flat in 2026 as the nomy adjusts to lowering interest rates before returning to trend growth (+2 percent) in 2027. e Federal Reserve has pulled down the inflation rate and, lacking any unforeseen situation, uld finally return inflation to a manageable annual growth rate of slightly above 3 percent. e Fed’s target rate for inflation is 2 percent. There is a clear, direct correlation between ation and energy costs. Controlling energy costs is a major step in lowering the rate of growth nflation. Figure 1 - Real GDP Annual Growth ADOBESTOCK ©

The U.S. real gross domestic product (GDP) growth will slow in 2024 and match the prior year’s growth. Economic growth is forecasted to fall slightly in 2025 and remain flat in 2026 as the economy adjusts to lowering interest rates before returning to trend growth (+2 percent) in 2027. The Federal Reserve has pulled down the inflation rate and, lacking any unforeseen situation, finally should return inflation to a manageable annual growth rate of slightly above 3 percent. The Fed’s target rate for inflation is 2 percent. There is a clear, direct correlation between inflation and energy costs. Controlling energy costs is a major step in lowering the rate of growth in inflation.

U.S. REAL GDP ANNUAL GROWTH

U.S. Real GDP Growth

-1.0% -2.0% -3.0% -4.0% Annual % Change

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

Annual % change in the inflation-adjusted value of the total domestic economy Annual % change in the inflation-adjusted value of the total domestic economy FIGURE 1

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