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(Bloomberg) — The Norwegian economy recorded a third consecutive quarter of expansion, as a recovery in purchasing power bolstered car purchases and a weak krone underpinned exports.

Mainland gross domestic product, which excludes offshore energy industry and shipping, grew by 0.1% in the second quarter from the previous three months, according to a release from Statistics Norway published Thursday. First-quarter growth was revised lower to 0.1%.

Thursday’s reading was just below the 0.2% growth estimated by both the central bank and economists in a Bloomberg survey.

The outcome shows the energy-rich Nordic nation is dented more than previously assumed by the fallout from interest rates at a 15-year high, even as the slowing inflation and wage growth above 5% fuel consumption.

The weaker-than-forecast figures, together with revision of earlier data, may still increase the odds of Norges Bank reducing borrowing costs before next year. The Norwegian policymakers have kept delaying monetary easing as one of the most aggressively hawkish in the rich world, forecasting no change “for some time ahead” at their meeting last week.

“Negative revisions clearly leave a picture of a weaker mainland economy than Norges Bank projected back in June,” said Kristoffer Kjaer Lomholt, head of FX and corporate research at Danske Bank A/S. “All in all, a report that should keep the door open for a December cut.”

Household consumption grew by 1.6% on quarter due to a “strong upswing” in car purchases, the statistics office said, while noting the figures for the sector can fluctuate “widely.” Trade and power supply also helped boost mainland growth, it said.

The krone is hovering near four-year lows, helping demand for Norwegian exports, as well as its tourism sector. It was little changed following the report, trading 0.1% lower at 11.7233 versus the euro at 8:50 a.m. in Oslo.

Total exports grew 5.6% on quarter, the fastest increase in almost two years, as oil and gas shipments were less affected by maintenance works that are usual for the season.

The country’s largest lender, DNB Bank ASA, on Wednesday kept its forecast for full-year growth of 0.8% in 2024 and projected next year’s growth at 1.6%, largely due to higher purchasing power of consumers. That compares with Norges Bank’s estimates of expansion of 0.8% and 1.3%, respectively, published in June.

Analysts at DNB and Svenska Handelsbanken AB said the deviation from the central bank’s estimates was too small to clearly affect policymakers’ rate outlook.

–With assistance from Joel Rinneby.

(Updates with analyst comment, market reaction from fourth paragraph.)

©2024 Bloomberg L.P.

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The economy has become a key issue as the 2024 election approaches, with both Democrats and Republicans presenting contrasting views on how the economy has fared under President Joe Biden and former President Donald Trump.

As the 2024 election approaches, the state of the economy has emerged as a pivotal issue, dominating discussions and shaping voter concerns. With both major parties presenting conflicting narratives, the question of whether the U.S. economy has improved under President Joe Biden or was already on the path to recovery under former President Donald Trump is at the forefront of the political debate.

When President Joe Biden assumed office in January 2021, the U.S. was grappling with the aftermath of the COVID-19 pandemic, which had precipitated the most severe economic downturn since the Great Depression. The global pandemic disrupted businesses, shuttered industries, and left millions of Americans unemployed, leading to widespread economic uncertainty.

Democrats, including prominent figures such as Senator Bernie Sanders and former President Barack Obama, have underscored the economic strides made under Biden’s administration. During the Democratic National Convention, Sanders emphasized that when Biden took office, the economy was in a precarious state, reeling from the impact of the pandemic. Obama echoed these sentiments, noting that the economic recovery under Biden has been significant.

The Biden administration’s response to the economic challenges was swift and comprehensive. In March 2021, Biden signed the American Rescue Plan, a $1.9 trillion economic stimulus package aimed at providing direct relief to Americans, supporting businesses, and bolstering the economy. The plan included $1,400 direct payments to individuals, extended unemployment benefits, and an expansion of the child tax credit, measures designed to alleviate the financial strain on millions of households.

In the following year, Biden enacted additional legislation to further stimulate economic growth. The $891 billion Inflation Reduction Act focused on addressing rising prices and fostering long-term economic stability. Additionally, the $280 billion CHIPS and Science Act aimed to strengthen U.S. competitiveness in technology and manufacturing, securing the nation’s position in critical industries.

Under Biden’s leadership, the labor market experienced a rapid recovery. By 2022, the U.S. had regained all the jobs lost during the pandemic, and by January 2023, the unemployment rate had dropped to levels even lower than those seen before the pandemic. This period of job creation has been hailed as one of the administration’s key achievements, contributing to the broader narrative of economic resurgence.

Republicans, however, present a different narrative, asserting that the economic recovery began well before Biden took office. They credit former President Donald Trump with laying the groundwork for the rebound, pointing to the significant economic measures implemented during his administration in response to the pandemic.

The onset of COVID-19 in early 2020 sent shockwaves through the U.S. economy, leading to a sharp decline in economic activity. The unemployment rate soared to nearly 15% in April 2020, the highest level since the Great Depression, and the stock market experienced unprecedented volatility.

In response, Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, a $2.2 trillion stimulus package that provided direct payments to Americans, expanded unemployment benefits, and offered financial assistance to businesses. This was followed by another $900 billion relief package in December 2020. These measures, Republicans argue, were instrumental in stabilizing the economy and setting the stage for the recovery that followed.

By the end of 2020, key economic indicators showed signs of improvement. The unemployment rate had fallen to 6.7%, and the Dow Jones Industrial Average and the S&P 500 had both reached record highs, signaling renewed investor confidence. Republicans contend that these positive trends demonstrated the effectiveness of Trump’s policies and argue that Biden inherited an economy that was already on the path to recovery.

Economists who have examined the recovery acknowledge that both administrations played roles in the economic rebound, but they caution against oversimplified narratives. The pandemic-induced recession, which lasted only two months, was the shortest in U.S. history, but its effects were profound and long-lasting. While the economy had indeed begun to recover under Trump, significant challenges remained when Biden took office, particularly in the labor market and global supply chains.

“The economy at the end of 2020 had recovered substantially, but there were still millions of job losses that the economy hadn’t recovered from,” said Dennis Hoffman, an economist at Arizona State University. He noted that while the initial recovery was swift, the economy remained vulnerable and in need of continued support.

Jesse Rothstein, a professor of public policy and economics at the University of California, Berkeley, described the economic situation at the outset of Biden’s presidency as an “economic crisis,” despite the progress made in the latter half of 2020. Rothstein emphasized that the recovery was far from complete and required additional government intervention to sustain momentum.

The debate over the impact of Biden’s stimulus measures, particularly the American Rescue Plan, on inflation adds another layer of complexity to the economic narrative. While some economists, like Jason Furman, a Harvard University professor and former economic adviser to President Obama, argue that the plan contributed to rising inflation, others attribute the inflationary pressures to global supply chain disruptions and other factors related to the pandemic.

Matias Vernengo, a professor of economics at Bucknell University, dismissed the notion that the stimulus spending was the primary driver of inflation. Instead, he pointed to the imbalance of supply and demand in the post-pandemic economy as the main cause of rising prices. Vernengo also noted that inflation has since moderated, suggesting that it was a temporary shock rather than a lasting problem.

As the 2024 election looms, voters are confronted with divergent economic narratives from both parties. Democrats highlight the progress made under Biden, emphasizing job creation, economic growth, and legislative achievements. Republicans, meanwhile, focus on the recovery that began under Trump, arguing that the economy was already on an upward trajectory before Biden took office.

However, the reality of the U.S. economic recovery is more nuanced. Both administrations implemented critical measures that contributed to the rebound, and both faced significant challenges. While the economy has made substantial progress since the depths of the pandemic-induced recession, the journey to full recovery has been complex, with successes and setbacks along the way.

As voters assess the competing claims, they are tasked with considering the broader context of the recovery, recognizing that the story of the U.S. economy in the years following the pandemic is one of shared responsibility, evolving challenges, and ongoing efforts to build a resilient and inclusive economic future.