Economists predict US inflation will keep cooling and the economy can avoid a recession
A survey shows most business economists think the U.S. economy could avoid a recession next year, even if the job market ends up weakening under pressure brought by high interest rates
NEW YORK — Most business economists think the U.S. economy could avoid a recession next year, even if the job market ends up weakening under the weight of high interest rates, according to a survey released Monday.
Only 24% of economists surveyed by the National Association for Business Economics said they see a recession in 2024 as more likely than not. The 38 surveyed economists come from such organizations as Morgan Stanley, the University of Arkansas and Nationwide.
Such predictions imply the belief that the Federal Reserve can pull off the delicate balancing act of slowing the economy just enough through high interest rates to get inflation under control, without snuffing out its growth completely.
“While most respondents expect an uptick in the unemployment rate going forward, a majority anticipates that the rate will not exceed 5%,” Ellen Zentner, president of the association and chief U.S. economist at Morgan Stanley, said in a statement.
The Federal Reserve has raised its main interest rate above 5.25% to the highest level since early in the millennium, up from virtually zero early last year.
High rates work to slow inflation by making borrowing more expensive and hurting prices for stocks and other investments. The combination typically slows spending and starves inflation of its fuel. So far, the job market has remained remarkably solid despite high interest rates, and the unemployment rate sat at a low 3.9% in October.
Most of the surveyed economists expect inflation to continue to slow in 2024, though many say it may not get
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