Economy to slow in 2024, economists see 50% recession odds: NABE

The U.S. economy, which is on pace to grow 5.2% in the third quarter, is heading for a sharp slowdown next year, according to the nation’s leading economists.

“The NABE [National Association of Business Economics] Outlook Survey Panel anticipates stronger U.S. economic growth projections for 2023 than in the October Outlook survey, but panelists expect growth to slow to 1% between the fourth quarter of 2023 and the fourth quarter of 2024,” said NABE President Ellen Zentner, chief U.S. economist at Morgan Stanley, in the group’s latest survey.

U.S. GDP is expected to slow to 1.2% in the fourth quarter as tracked by the Federal Reserve Bank of Atlanta’s GDP Now, which was updated on Dec. 1, citing a slowdown in construction spending and manufacturing.


Also, consumers spent on experiences such as concerts, including Taylor Swift’s Eras Tour, which ranked No. 1 by raking in nearly $800 million gross, per Forbes, but these patterns likely didn’t continue in the fourth quarter at the same level, economists say.

Even with a slowing economy, fewer economists see a recession in the cards, with “three in four assigning a probability of 50% or less,” according to the survey.

On Friday, the government’s report on November job growth is expected to show employers added 180,000 positions, slightly above the prior month’s 150,000, while the unemployment rate is seen holding at 3.9%.

The following Tuesday consumer inflation is expected to slip to 3.1% while the core rate, which strips out volatile food and energy prices, is seen holding at 4%. Both remain elevated but off the peak of inflation’s hot streak in the summer of 2022 when the consumer price index hit 9.1%. The NABE survey also predicts inflation to continue moderating.

“Panelists anticipate further slowing in core inflation — excluding food and energy costs — but doubt it will reach the Federal Reserve Board’s 2% target before year-end 2024,” said NABE Outlook Survey Chair Mervin Jebaraj, director of the Center for Business and Economic Research at the University of Arkansas.


Still, Federal Reserve Chairman Jerome Powell warned last week that policymakers may not be done with their rate hike cycle.

“We are prepared to tighten policy further if it becomes appropriate to do so,” he said in remarks.

The market shrugged off the warning, with the Dow Jones Industrial Average and the S&P 500 hitting highs of 2023 last week.

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