Positive Outlook Continues for 2024
Forecasts for the early months of 2024 indicate sustained growth, albeit at a slower pace, suggesting that a recession is unlikely to materialize imminently. The job market remains stable, with low layoffs and steady job growth contributing to overall economic stability. According to Brian Rose, senior economist at UBS, the economy’s performance points towards a favorable soft landing.
“Looking back at last year, the combination of growth and inflation that we had was not considered in the realm of possibility by most people. Consumers have increasingly funded their spending with credit cards and other forms of borrowing, such as ‘buy now, pay later’ loans, which could prove unsustainable, especially if the job market weakens. High interest rates continue to ripple through the economy, and developments overseas — from conflict in the Middle East to economic weakness in China — could have domestic consequences,” warns Rose.
Despite potential threats, investors remain undeterred, driving the stock market to record highs. Moreover, businesses exhibit increased confidence and are ramping up their investments after a year of preparation for a potential downturn. Ben Herzon, an economist at S&P Global Market Intelligence, believes that the economy’s progress has dispelled fears of a recession, and businesses are now focusing on growth.
However, it is noteworthy that the recent sharp rise in consumer prices is partly attributed to disruptions caused by the pandemic. As these disruptions subside, inflation has also eased. Michael Gapen, the chief U.S. economist at Bank of America, acknowledges that the current economic cycle is unprecedented due to the global pandemic.