Can the US Economy Continue to Avoid a Recession? Probably – RVBusiness – Breaking RV Industry News
EDITOR’S NOTE: The following is an excerpt of a report by TheConversation.com. Click here to read the full report.
With economic forecasters rewriting their 2024 outlooks following recent moves from the Federal Reserve, The Conversation turned to two financial economists to share their thoughts on the upcoming year. D. Brian Blank and Brandy Hadley are professors at Mississippi State University and Appalachian State University, respectively, who study finance, firm financial decisions and the economy. They explain what they’re watching in 2024.
Q: At this time last year, many experts saw a downturn on the horizon. Will that long-predicted recession finally come to pass in 2024?
A: The good news is, probably not.
The U.S. economy is not in a recession and will likely continue growing. Over the past year, gross domestic product has outpaced expectations, inflation is trending downward and employment remains robust. Real wages have increased, as has consumer spending. Additionally, housing demand is strong and financial markets are at all-time highs. While no one should argue that there will never be another recession, 2024 seems to be an unlikely time for one – unless there’s some unexpected spark like, for example, a new global pandemic.
To be fair, optimism leads to risk-taking, which can always contribute to the next downturn. And the U.S. economy faces plenty of challenges, including already elevated debt costs, a possible government shutdown, rising consumer debt and continued distress in commercial real estate, which could result in rolling industry downturns. Other headwinds include the national debt, other nations’ weaker economies and ongoing global conflict and trade tensions.
While 2023 has seemed to many people like a “soft landing” – that elusive achievement in which policymakers reduce inflation without sparking a downturn – prior recessions have followed periods where people thought they had been avoided. That may be why bankers, finance leaders and economists are still noting the risks of interest rates remaining high.
Still, the fundamentals are strong and may be on the rise, if you believe chief financial officers. Plus, despite dysfunction in Washington, recent laws and policies like the CHIPS and Science Act, the bipartisan infrastructure deal, the AI Bill of Rights and the Executive Order on Safe, Secure, and Trustworthy Use of Artificial Intelligence could further boost economic growth by stimulating job creation and enhancing competitiveness. Notably, public and private manufacturing and industrial investment are at unprecedented levels, and technology is quickly advancing, further contributing to the positive economic outlook, not to mention strong consumer balance sheets.
Click here to read the full report.
