Economic Forecast for the US Economy
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Economic Forecast for the US Economy

Monthly update of The Conference Board's forecast for the US economy

The Conference Board Economic Forecast for the US Economy

June 13, 2024

The US economy started 2024 on a softer note than anticipated as elevated inflation and interest rates continued to weigh on the economy. While we do not forecast a recession in 2024, we do expect consumer spending growth to cool further and for overall GDP growth to slow to under 1% over the Q2 to Q3 2024 period. Thereafter, inflation should gradually normalize to the Fed’s 2-percent target in 2025 as quarterly annualized GDP growth rises toward its potential of near 2%. Interest rates should fall starting in late 2024 but may stabilize at levels exceeding the pre-pandemic average.

US consumer spending held up remarkably well in 2023 despite numerous headwinds. However, this trend has begun to wane. Real consumer spending growth is in retreat and consumer’s expectations about the future suggest a downturn is likely. Gains in real disposable personal income growth are softening, pandemic savings have been exhausted, and household debt is increasing rapidly. Consumers are spending more of their income to service debt, and auto loan and credit card delinquencies are rising quickly. Thus, we forecast that overall consumer spending growth will continue to slow in Q2 and Q3 2024 as households struggle to find a new equilibrium between income, debt, savings, and spending. While we anticipate labor market conditions to soften over this period, we do not expect them to deteriorate.

Business investment growth slowed in Q1 2024 as high interest rates increasingly weighed on financing activities. This trend should intensify over the course of this year as th

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