Current:Home > InvestEconomists see brighter outlook for 2024. Here's why. -TruePath Finance
Economists see brighter outlook for 2024. Here's why.
View
Date:2025-04-15 22:55:52
The U.S. economy is having what some experts are calling a "Goldilocks" moment.
A panel of economists expect this year to be characterized by faster growth, shrinking inflation and healthy job creation — a far cry from the widespread fears of a recession that marked 2023. The National Association for Business Economics (NABE) on Monday predicted that gross domestic product — a measure of the value of goods and services — will rise 2.2% in 2024, a significantly more bullish forecast than what the group projected only two months ago.
Inflation, which drives up the cost of groceries, rent and car insurance, among other spending categories, is expected to continue slowing this year. NABE forecasts that the Consumer Price Index — a basket of common goods and services — will decline to an annual rate of 2.4% this year, compared with 4.1% in 2023 and 8% in 2022. Another closely watched gauge used by the Federal Reserve to assess price changes, Personal Consumption Expenditures, is also expected to continue easing.
NABE predicted the Fed will start cutting its benchmark interest rate between April and June, which would lower borrowing costs for individuals and businesses.
Still, economists note that the U.S. central bank is likely to move cautiously in lowering the federal funds rate.
"Based on comments from Fed officials this week, we now expect the Fed to wait until June to begin cutting interest rates," analysts with Capital Economists said in a report. "Moreover, when it does begin to loosen policy, we suspect that the Fed will initially adopt a gradual approach — with the intention of cutting at every other meeting."
Americans' economic outlook has brightened somewhat of late. A February poll by CBS News found that people's assessments of the economy are at their highest level in more than two years, although sentiment remains negative overall.
Buoying the mood has been the red-hot stock market, with both the S&P 500 and Dow Jones Industrial Average climbing to record highs last week.
"As occurred during the second half of the 1990s, the stock market is having a significantly positive wealth effect on the economy now that the major stock market indexes are at record highs," Ed Yardeni, chief investment strategist for Yardeni Research, said in a report predicting that the economy will remain resilient.
Gregory Daco, chief economist with EY, noted that the U.S. economy is growing much faster than other developed economies in Europe and Asia. He points to the job market as a key source of strength in 2024.
"The increased value of talent post-pandemic has meant that business managers are more reluctant to let go of their prized talent pool despite cost pressures and expectations of slower final demand growth," Daco told investors in a report. "Solid employment growth, combined with robust wage growth, has translated into strong real disposable income growth, which in turn has allowed consumers to continue paying high prices for goods and services."
NABE expects the nation's unemployment rate, now hovering near a 50-year low of 3.7%, to peak at 4% in 2024.
- In:
- Economy
- Consumer Price Index
- Inflation
Alain Sherter covers business and economic affairs for CBSNews.com.
TwitterveryGood! (59)
Related
- Average rate on 30
- Stranger Things Is Expanding With a New Animated Series on Netflix: Get the Details
- Taylor Swift and Joe Alwyn Break Up: Relive Their Enchanting 6-Year Love Story
- The fossil fuel industry turned out in force at COP26. So did climate activists
- 'Kraven the Hunter' spoilers! Let's dig into that twisty ending, supervillain reveal
- At COP26, nations strike a climate deal with coal compromise
- Clean up your mess, young activists tell leaders at COP26 climate summit
- 700 arrested in fifth night of French riots; mayor's home attacked
- Former longtime South Carolina congressman John Spratt dies at 82
- Today's Bobbie Thomas Details First Date Over 2 Years After Husband Michael Marion's Death
Ranking
- Rylee Arnold Shares a Long
- Many Americans are heading to Europe this summer. But after chaos in 2022, is European aviation ready?
- Benny watched his house drift away. Now, his community wants better storm protection
- The exact link between tornadoes and climate change is hard to draw. Here's why
- Appeals court scraps Nasdaq boardroom diversity rules in latest DEI setback
- How Love Is Blind's Chelsea Reacted to Watching Micah and Kwame’s Pool Scene on TV
- These 4 charts explain why the stakes are so high at the U.N. climate summit
- Draft agreement at the COP26 climate summit looks to rapidly speed up emissions cuts
Recommendation
Travis Hunter, the 2
These researchers are trying to stop misinformation from derailing climate progress
S Club 7 Singer Paul Cattermole Dead at 46
Giving up gas-powered cars was a fringe idea. It's now on its way to reality
Louvre will undergo expansion and restoration project, Macron says
Biden says climate fears are well-founded but touts progress at the U.N. summit
This $20 Pre-Seasoned Cast Iron Skillet Has 52,000+ 5-Star Amazon Reviews
Saudi Arabia pledges net-zero greenhouse gas emissions by 2060