Source: Kiplinger.com
As 2023 wraps up, here are 10 big predictions for the new year
1. The economy will dodge recessionThe economy will dodge recession, barring an unforeseen shock to the system. A year ago, we believed recession was likely, in light of the classic warning indicators that were flashing. Yet the economy has proved unexpectedly strong, and that strength looks poised to continue in 2024. Growth is likely to slow down, though. Figure on 1.7% GDP growth for the year, vs. 2.5% in 2023, as higher interest rates weigh on consumers and businesses alike. The first half of the year’s pace stands to be particularly slow, with activity picking up in the second half as interest rates start to ease a bit.
2. Inflation will finally get mostly reined inLook for the headline inflation rate to fall to 2% before the end of the summer, but then turn higher, ending the year around 2.7%.
Core prices — inflation that strips out food and energy costs — will trend down from 4% now to 2.4% toward the end of next year.
3. Easing inflation opens the door to rate cuts