The U.S. economy grew faster than expected in the second quarter, with gross domestic product rising at an annual rate of 3.3%, according to a Commerce Department report released Aug. 28. That’s higher than both the earlier estimate of 3.0% and the 3.1% forecast from Dow Jones.
But what does this mean for your personal finances?
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Jeff Bartlett, co-founder and general manager at GOBankingRates, broke down how strong economic growth under President Donald Trump could directly benefit your bank account — from higher wages to better credit access.
Higher Wages and Job Security
“Strong economic growth often leads to increased demand for workers,” Bartlett said. “Businesses expand during economic growth, creating more openings.”
This can lead to raises, bonuses and more promotions to attract and retain talent, as well as greater job stability.
“Companies are less likely to downsize when sales and profits are rising,” Bartlett said, which means less worry about layoffs and more confidence in your financial future.
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More Job Opportunities
Economic expansion encourages businesses to grow — opening new locations, launching products and increasing production.
“Unemployment tends to fall, giving people more choices and bargaining power,” Bartlett said.
With more options, you can negotiate better pay, benefits or working conditions.
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Stronger Retirement Account Performance
“A growing economy boosts corporate earnings, pushing up stock prices,” Bartlett said.
If you have a 401(k), IRA or brokerage account, you’ll likely see your account balances grow, helping you build a more secure retirement.
Easier Access to Credit and Loans
“Banks are more willing to lend in a strong economy,” Bartlett said.
This can mean easier approval for loans and credit cards, lower interest rates and better terms for mortgages, car loans or emergency funds. This makes it easier to make big purchases or handle unexpected expenses.
Increased Consumer Confidence and Spending
When people feel good about the economy, they’re more likely to spend money, Bartlett said.
That leads to more business for local shops and restaurants, more jobs and services in your community and a positive cycle of growth and investment. Confidence fuels spending, which keeps the economy strong.
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Potential for Lower Taxes and Better Public Services
“Higher growth means more tax revenue without raising tax rates,” Bartlett said.
That’s because as people and businesses earn more, they pay more in taxes.
This gives the government room to cut taxes or offer rebates, and invest in public services like roads, schools and healthcare.
Stronger Housing Market
“Home prices tend to rise with economic growth,” Bartlett said.
This benefits homeowners, who build equity faster; renters, as more housing developments may become available; and communities, through increased property values and investment. A strong housing market can boost your net worth and financial stability.
More Side Hustle and Business Opportunities
“A booming economy creates demand for services and products,” Bartlett said.
This makes it easier to start or grow a small business, launch a side hustle, and tap into new customer bases and funding sources. Entrepreneurship becomes more accessible, helping you increase your income potential.
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Long-Term Economic Stability for Easier Planning
“Economic growth can shrink the deficit without painful spending cuts or tax hikes,” Bartlett said. “A healthier long-term economy helps keep inflation and interest rates in check.”
This supports predictable financial planning, and promotes long-term prosperity for families and businesses.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: 9 Ways Trump’s Economy Could Boost Your Bank Account, According to an Expert
