In voting for change, the electorate in November excoriated the economic
policies of the Biden Administration, but rarely has the economy entered a new
presidential term with such momentum. Despite two years of sustained high
real interest rates, the economy has not significantly slowed, and roared
through 2024 with recent unemployment at 4.1%, real GDP growth at 2.8%,
inflation down to 2.4% (PCI basis), sturdy productivity gains, 48 consecutive
months of job growth and the stock market posting multiple record highs.
This stellar economic performance has boosted State revenues slightly above
expectations, except for a few underperforming new taxes, and kept total first
half FY25 revenues across all three major funds 3.7% above July estimates.
While FY26 will also benefit from this inertia, some of the proposed economic
policies of the incoming administration could slow growth in FY27 and beyond.