US Economy Set for Growth in 2025, Projects 4.7% Investment Expansion and 2.7% GDP Increase

The U.S. economy is poised for continued expansion in 2025, buoyed by a resilient labor market, increasing household wealth and robust consumer spending, according to the 2025 Equipment Leasing & Finance U.S. Economic Outlook.

Released by the Equipment Leasing & Finance Foundation, the report anticipates a 4.7% growth in real equipment and software investment, complemented by a projected 2.7% rise in real GDP.

The Foundation’s study, prepared by Keybridge, examines trends within the $1.3 trillion equipment leasing and finance sector, contextualizing its findings within the broader economic landscape.

“The economy blew past expectations in 2024 as strong consumer spending and business investment pushed growth above trends experienced prior to the pandemic. Data on new loan volume from Equipment Leasing & Finance Association’s (ELFA) CapEx Finance Index and executive sentiment in the Foundation’s Monthly Confidence Index suggest that momentum carried through to the fourth quarter, and lines the economy up for a strong 2025,” Leigh Lytle, president of the Foundation, and president & CEO of ELFA said.

“That said, the potential for a trade war and persistent inflation could cause the Federal Reserve to slow the pace of rate decreases, which would weigh on the U.S. economy. Time will tell how all of these things shake out, but if we’ve learned one thing from 2024, it’s to never bet against the strength of American consumers or the resiliency of American business.” 

Key Highlights from the 2025 Outlook

• Robust Equipment Investment: Equipment and software investment grew 7.5% (annualized) in Q3 2024, marking the second quarter of solid growth. Aircraft investments have surged since Q1, driving much of this increase, with gains also seen in computers and communication equipment. Conversely, construction machinery investment contracted.
• U.S. Economic Leadership: The U.S. economy has outpaced international peers, now 11% larger than its pre-pandemic size in inflation-adjusted terms. Optimism among businesses is fueled by anticipated tax cuts and regulatory relief under the incoming administration, though uncertainties remain around potential tariffs and energy policy shifts.
• Steady Federal Reserve Approach: The labor market remains healthy, adding 227,000 jobs in November. Fed Chair Jay Powell has described economic performance as “remarkably good,” with markets predicting a potential rate cut following the Federal Open Market Committee’s December meeting. Policymakers will balance inflation risks against labor market trends in 2025.

The report reflects optimism while acknowledging risks, such as inflation and global trade uncertainties. However, the Foundation’s analysis emphasizes the continued strength of the U.S. economy as a driver of global growth.