Kansas: Navigating national economic headwinds with free-market principles
GUEST COLUMN, Vance Ginn, Kansas Policy Institute
The recent performance of the U.S. economy presents a complex picture for Kansans. The U.S. gross domestic product (GDP) grew at an annualized pace of 2.8 percent in the second quarter of 2024, fueled largely by consumer spending, which rose by 2.3 percent. However, this growth masks underlying weaknesses critical for states like Kansas to consider.
The personal consumption expenditures (PCE) index, excluding volatile food and energy prices, increased by 0.2 percent in June and remained at 2.6 percent year-over-year, indicating persistent inflation above the Federal Reserve’s target of 2 percent. The Federal Reserve has tried to curb inflation by reducing its balance sheet from $9 trillion to $7.2 trillion, which includes most U.S. Treasury debt, mortgage-backed securities, and federal agency debt. But its balance sheet remains significantly higher than the pre-pandemic $4 trillion, indicating substantial inflationary pressures remain as too much money is chasing too few goods and services.