 The U.S. economy embarked on a rollercoaster ride in 2023, grappling with high inflation, soaring interest rates, wars abroad, and a shaky banking sector. The inflation rate is slowing down but American consumers are still paying 18% to 20% more for "just about everything", vox populi. According to the latest Bankrate survey, a staggering 63% of Americans don't believe they will see any improvement in their financial situation in 2024. Although the U.S. economy has shown resilience in the face of numerous challenges, many analysts predict a significant slowdown in the coming months, with some even anticipating a recession. We forecast at least two-quarters of negative growth that will be broadly felt across the economy. |
Buckle Up for a Bumpy 2024, Economists Say
Inflation, interest rates, tight housing supply, and an election year: Analysts are divided on which direction the economy will shake out this year.
Jan. 7.– The U.S. economy embarked on a rollercoaster ride in 2023, grappling with high inflation, soaring interest rates, wars abroad, and a shaky banking sector.
This time last year, the U.S. economy was bracing for an impending recession. Concerns about a recession persisted through 2023, particularly following the banking turmoil in the second quarter, which witnessed a 1930s-style bank run on Silicon Valley and First Republic Banks.
The Federal Reserve intervened with emergency measures, and as a result, bank liquidity recovered and financial and credit markets soon normalized, as if the crisis had never happened.
In the following months, the U.S. economy surpassed expectations and defied recession fears. The economy grew at a faster-than-expected 4.9 percent in the third quarter, boosted by strong consumer and government spending.
Currently, there’s growing talk about the prospect of a “soft landing” in 2024. Nevertheless, economists remain cautious, with many expecting a bumpy ride ahead due to the lingering effects of tight monetary policy over the past two years.
Recession Fears Not Over
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