The U.S. Faces Economic Downturn in 2024, Predicts National Association for Business Economics

The National Association for Business Economics’ Outlook Survey suggests the United States is on the brink of a significant downturn in 2024, grappling with persistent high inflation, a rise in unemployment, and a 50% chance of entering a recession. The survey, closely monitored for economic insights, indicates that U.S. Gross Domestic Product (GDP) is anticipated to experience a modest growth rate of 1% throughout 2024. This marks a substantial decline from the third quarter’s 5.2% annualized GDP expansion, the fastest rate since 2021.

According to Ellen Zentner, the President of NABE and Chief Economist at Morgan Stanley, real GDP, adjusted for inflation, only reached 2.1% in the third quarter. This contrasts with the last economic crisis in 2008 when the Fed funds rate was 5.25%, and inflation stood at 4.1%.

The survey reveals that 25% of the 30 economists surveyed foresee a recession in 2024, assigning a probability of 50%. Presently, interest rates range between 5.25% and 5.5%, marking the highest in 22 years, while inflation persists at 3.2%, surpassing the Federal Reserve’s preferred 2% rate.

Mervin Jebaraj, Director of the Center for Business and Economic Research at the University of Arkansas and NABE Outlook Survey Chair, suggests that panelists expect a further slowdown in core inflation, excluding food and energy costs. However, there is skepticism regarding it reaching the Federal Reserve Board’s 2% target before the end of 2024.

The Federal Reserve Bank of Atlanta, through its GDPNow forecasting model, also anticipates a downturn in the coming year, pointing to reduced construction spending and manufacturing, increased labor costs, and decreased productivity.

Richard Shaw
Richard Shaw
Richard Shaw is a seasoned conservative news journalist based in New Orleans, Louisiana. With over 15 years of experience in the industry, Richard is known for his insightful reporting on national and international affairs, as well as his in-depth analysis of political and cultural issues.

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