Crypto News: A Goldilocks economy for Trump

The Bureau of Economic Analysis just released numbers on the US economy for the end of 2024, and there's a lot to celebrate. The big question for the Trump administration, Enda Curran writes, is whether its policies can keep growth in the sweet spot. Plus: Barnes & Noble was struggling, then BookTok came along. If this email was forwarded to you, click here to sign up.

Donald Trump has promised to unleash a new Golden Age for America, and he's inherited a Goldilocks economy to get that era started.

That's the assessment of economists looking over the final report card for 2024, which shows the US grew by an annualized 2.3% in the fourth quarter, according to data released Thursday. Overall, the economy expanded 2.8% in 2024 after hitting 2.9% and 2.5% in the prior two years—a solid performance for the Biden administration.

Much of the strength was due to households continuing to buy even as inflation smoldered. Consider this: Consumer spending (the largest share of economic activity) advanced at a 4.2% pace, the first time since late 2021 that outlays exceeded 3% in consecutive quarters. That was the biggest acceleration since early 2023.

The Goldilocks scenario is one where inflation has cooled while growth and the labor market are holding up. And that's where the US is now. "The economy is in quite a good place," Federal Reserve Chair Jerome Powell told reporters Wednesday.

Powell at his news conference on Wednesday. Photographer: Andrew Caballero-Reynolds/AFP

The US's performance contrasts starkly with much of the rest of the world, where major economies continue to struggle. In Germany, gross domestic product shrank 0.2% last year after a 0.3% decline in 2023—just the second time since 1950 that Europe's largest economy has contracted two years in a row. China is still suffering from a real estate bust. The world's No. 2 economy slowed to 4.2% in 2024 (unadjusted for price changes), the second-weakest pace since the country began transitioning to a market economy in the late 1970s.

In Washington, the pervasive mood is optimism as President Donald Trump's promised mix of tax cuts and deregulation are expected to ramp up business confidence, even amid worries over the impact of potential tariffs and a massive deportation campaign.

Trump has set Feb. 1 as a deadline for an announcement of tariffs of as much as 25% on goods from Canada and Mexico. And the administration is already aggressively rounding up undocumented immigrants, a move that, economists say, could eventually upend the labor market.

The White House is also clamping down on public spending and has sent shock waves through the government by offering federal workers a chance to voluntarily resign—with a warning of planned aggressive cuts to the federal workforce. (It had to rescind a memo freezing an array of federal grants, loans and financial assistance amid a legal challenge.)

The big unknown for 2025 is whether Trump's team can thread the needle between that shock therapy while also keeping the economy motoring along. But for a president promising a new Golden Age, those inherited statistics offer the possibility of a strong start.

In Brief

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Viral Hits Boost a Bookstore

Illustration: Shira Inbar for Bloomberg Businessweek

Tyler Kramer is turning 38, but he's bouncing around the store like a little kid. His wife has given him the ultimate birthday gift: three minutes to race around the aisles of Barnes & Noble, filling his basket. He grabs a mix of classics, including Octavia E. Butler's Kindred, and more recent cult hits, such as Pierce Brown's Dark Age and Tamsyn Muir's Gideon the Ninth. A video of the bookshop sweep, which has almost half a million views on TikTok, captures what Kramer calls his "best birthday ever."

The video is a window into the online buzz that's helped Barnes & Noble Booksellers Inc., America's largest brick-and-mortar bookstore, make an unlikely comeback. Thanks to a pandemic-era swarm to BookTok—the name TikTok's book-loving community coined for itself—US readers are more quickly discovering titles and recommending them to friends and followers. That has offered Barnes & Noble, which reported seven straight years of falling sales before it became the target of a billionaire hedge fund owner in 2019, a chance to resurrect itself.

James Daunt, the chief executive officer instated by Elliott Management Corp. to run the retailer, says Barnes & Noble is growing again. Sales are up by the "mid-single digits" since 2021, the company says. Last year, it opened 57 stores, the most in a single year since at least 2007—and it plans to open more than 60 this year. Many of the new locations are in major markets, including Las Vegas, Santa Monica, California and Washington, DC.

Lily Meier writes about how the new stores have become a gathering place for book influencers: The Internet Almost Killed Barnes & Noble, Then Saved It

Dizzying Rally

94%

That's how much coffee prices have surged in the past year, hurting demand in most major markets. Now, consumption is even starting to waver in the places where it was making a last stand. Previously in the Businessweek Daily: How coffee shops have turned thrifty to manage costs.

Climate Change Is Everywhere

"I think it's important to talk about it, to have people understand that this could happen to them. There's no safe place in the US."

Jared Rennie

Meteorologist with the US National Centers for Environmental Information in Asheville, North Carolina

Climate scientists are acutely aware of the devastation that a warming world can wreak on communities. But when disaster shows up at their doorstep, it hits in a completely different way.