The U.S. economy shows strong performance by the end of 2024, with an increase in December service sector activities.

The latest data shows that the U.S. economy performed strongly at the end of 2024. In December, the final value of the S&P Global Services PMI for the U.S. was 56.8, down from 58.5 in the previous month; and the final value of the S&P Global Composite PMI was 55.4, down from 56.6. Despite being slightly lower than the initial data, the overall level is still the best since March 2022. Additionally, after five consecutive months of decline, employment numbers have shown a rebound for the first time; business confidence has reached a new 18-month high; and cost inflation has decreased to an 11-month low, indicating some easing of inflationary pressures. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, expressed optimism about this, stating, "Business surveys at the end of 2024 show a positive momentum in the U.S. economy." The significant growth in the service sector is attributed to an increase in orders and optimistic expectations for the future of 2025. With the upcoming Trump administration expected to implement more business-friendly policies (such as favorable tax and regulatory environment, and tariff protection measures), market confidence has significantly improved. While the manufacturing sector continues to drag down economic performance, the strong performance of the service sector is enough to offset its impact. Data shows that the economy is expected to achieve steady growth in the fourth quarter, continuing the 3.1% GDP growth in the third quarter. Williamson noted, "The strong performance of the service sector PMI in December sets a good tone for the U.S. economy in 2025. However, due to such strong economic growth, policymakers may take a more cautious approach in lowering interest rates." It is worth noting that financial services activity saw significant growth at the end of 2024, partially driven by market expectations of a decrease in future borrowing costs. However, if there are major changes in interest rate policies, the economy may face vulnerability, especially the financial services sector, which has been a recent growth engine.