“Take off by the fourth quarter”: parsing Bessent’s prediction through current U.S. data

Treasury Secretary Scott Bessent said the U.S. economy should “take off by the fourth quarter of this year,” noting that policy changes are beginning to take hold. Coverage of the remarks and context is available via Axios: U.S. economy should accelerate by fourth quarter.

Where things stand right now

A claim of imminent acceleration invites a simple test: do the latest, high-quality indicators point toward a turning point by late Q3 or early Q4? Headline inflation has cooled from its post‑pandemic peaks but remains a live policy constraint; you can track the most recent CPI release directly from the Bureau of Labor Statistics (BLS). Labor market conditions have softened from 2022–2023 extremes: job gains have slowed, unemployment has edged higher from cycle lows, and wage growth has moderated; the monthly Employment Situation report is here: BLS jobs report.

On growth, the Bureau of Economic Analysis (BEA) shows real GDP expanding at a moderate pace through the mid‑year prints. For a near‑real‑time signal on current‑quarter momentum, many practitioners watch the Atlanta Fed’s GDPNow model; it is volatile but useful for gauging directional shifts as new data arrive.

Quick reads: inflation, jobs, output▸

Prices Latest CPI and core CPI: BLS CPI dashboard

Jobs Nonfarm payrolls, unemployment rate, wages: BLS Employment Situation

Output BEA GDP, PCE, and revisions: BEA GDP data

Manufacturing, services, and demand signals

Purchasing Managers’ Indexes provide a timely look at activity. The Institute for Supply Management’s Report On Business tracks manufacturing and services separately. Through the most recent releases, manufacturing has been oscillating around the expansion/contraction threshold, while services activity remains in expansion, though uneven across categories. A late‑year “take off” case would ideally feature sustained improvement in new orders and employment sub‑indices, not just supplier delivery or price components.

On the consumer side, real disposable income growth, the personal saving rate, and revolving credit usage—available from BEA personal income and outlays—frame spending power into Q4. Sentiment indicators, including the University of Michigan Surveys of Consumers, capture perceptions of inflation and job security that influence near‑term demand.

Policy levers behind a Q4 acceleration thesis

Bessent’s assertion rests on the premise that recently enacted or pending policy moves begin to bite. The growth path from here will be influenced by three interlocking levers: monetary policy, trade and tariff settings, and fiscal/tax policy. Deloitte’s mid‑year U.S. Economic Forecast frames baseline, upside, and downside scenarios around these very assumptions—particularly the course of tariffs and Treasury yields.

The Federal Reserve’s stance conditions financial conditions for households and firms. The latest policy statement, minutes, and summary of economic projections are maintained by the Federal Reserve. If inflation continues trending toward target, the case for gradual policy easing strengthens into late 2025; if inflation proves sticky, restrictive rates could persist longer, tempering the “take off” narrative.

Trade policy affects supply chains, input prices, and export demand. Shifts in tariff schedules can both raise costs (near term) and redirect production (medium term). The evolving tariff and trade picture is covered in the U.S. Census Bureau trade data and policy analyses referenced in Deloitte’s scenarios.

Reconciling the optimism with official data

Axios’ report on Bessent’s remarks notes that the administration’s internal assessment is more upbeat than government data showing rising inflation pressure and a weakening labor market (read the coverage). The gap between “hard data” and forward‑looking expectations is not unusual late in cycles. Hard data (payrolls, industrial production, real retail sales) tend to lag turning points; soft data (surveys, sentiment, PMIs) and financial conditions often move first. For a “take off” to materialize by Q4, we would look for:

• Consecutive months of moderating core inflation in CPI and PCE price indices.
• Stabilization in the unemployment rate with improving labor force participation (BLS Employment Situation).
• Upturns in ISM new orders and employment sub‑indices (ISM).
• Upward revisions to BEA GDP and stronger GDPNow nowcasts into late Q3 (GDPNow | BEA GDP).

Scenario map: baseline, upside, downside▸

Baseline: Moderating inflation, cautious Fed, modest real GDP growth as rates gradually ease. See Deloitte’s baseline.

Upside (“take off”): Disinflation resumes, financial conditions ease, new orders and capex lift output. ISM and GDPNow trend up together.

Downside: Inflation stalls, rates stay restrictive, hiring slows further, and consumer spending cools under higher debt service.

What could power a fourth‑quarter lift?

A durable late‑year acceleration typically requires multiple cylinders firing at once. On the household side, real wage growth (wages above inflation) supports consumption; watch average hourly earnings in the BLS tables alongside inflation in PCE prices. For firms, easing credit conditions and clearer demand visibility motivate capex and inventory restocking. The Fed’s industrial production and nonfarm payrolls series offer additional perspective.

Housing and construction can re‑accelerate when mortgage rates fall meaningfully. The Freddie Mac PMMS mortgage rate series is a useful weekly pulse; lower rates tend to revive single‑family starts and related durable goods demand, adding to late‑year momentum if the trend persists.

Risks that could delay the “take off”

Three near‑term risks bear watching. First, a stall in disinflation would keep real rates elevated, restraining interest‑sensitive sectors. Second, external shocks—energy prices or geopolitical disruptions—could squeeze real incomes and margins. Third, tighter fiscal conditions or delays in legislative packages would blunt the policy impulse. The Congressional Budget Office (CBO) updates fiscal projections that map onto growth and interest‑rate paths.

Corporate earnings guidance also acts as a forward beacon: if management teams guide to stronger revenue growth and margin expansion into Q4, that corroborates the macro “take off” view. Aggregated earnings calendars and revisions are tracked by major data providers and financial press; for broad market context, the St. Louis Fed’s Economic Data resources offer curated links into official series.

Bottom line

The fourth‑quarter acceleration that Bessent envisions is plausible, but it hinges on observable thresholds: renewed progress on core inflation, stabilization in labor market slack, expansionary new orders in PMI surveys, and firmer nowcasts for real GDP. As those pieces align, the narrative shifts from aspiration to confirmation. Until then, the highest‑confidence path is to keep score with primary sources—the BLS for prices and jobs, the BEA for growth, the ISM for forward activity, and the Fed for policy—and update probabilities as the data print. For Bessent’s on‑the‑record framing, see the Axios write‑up: Bessent predicts a Q4 “take off”.

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