The American economy has grown remarkably in the last few months, setting the benchmark for other developed nations. According to the BBC, the US economy expanded by 2.8% in the last three months to September 2024.
Further, the data from the country’s Commerce Department indicates the US economic growth will outpace the growth of Europe or any other developed nation. Moreover, in the last quarter of 2023, the US GDP growth exceeded economists’ expectations and grew at 3.3%.
“The US is holding up much better than other countries. It seems like the engine of the US economy continues to hum along where it’s sputtering in other nations.”
Chief US Economist, Oxford Economics
How is the US Economy Managing to Power Ahead of Europe?
According to economists and experts, the American economy is outpacing European and other economies because:
Agile Policy Framework and Fiscal Measures
One of the core reasons the US economy is powering ahead is its proactive and agile policy framework. Over the past few years, the United States has implemented strategic fiscal measures, including significant infrastructure, technology, and research & development investments.
On the contrary, the European economies, particularly Germany, have faced challenges such as stagnant industrial growth and minimal GDP growth projections of merely 0.3% for 2025, following two years of mild recession, because of poor planning and policy development.
High Productivity Rates
Global competitiveness is no longer about labour costs but more about knowledge and skill within the labour force. According to the RSM, the 70% gap between the US GDP growth and the European Union economy can be attributed to lower productivity. The report further mentioned that since 2000, the real disposal income in the US economy has grown by twice as much as in Europe.
Forward-Looking Trade Policies
One of the defining factors in the US vs Europe economy is America’s forward looking trade policies. By maintaining an open trade regime and fostering strong international partnerships, the United States has mitigated global supply chain challenges and capitalised on new market opportunities.
As global economic conditions evolve, the positive momentum in the US economy will undoubtedly reinforce why the US is outperforming its European counterparts and leading the way on the world stage.
