Current:Home > ScamsEconomists predict US inflation will keep cooling and the economy can avoid a recession-DB Wealth Institute B2 Reviews & Ratings
Economists predict US inflation will keep cooling and the economy can avoid a recession
lotradecoin competition View Date:2024-12-26 05:16:22
NEW YORK (AP) — 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 all the way down to the Federal Reserve’s target of 2% until the following year.
Of course, economists are only expecting price increases to slow, not to reverse, which is what it would take for prices for groceries, haircuts and other things to return to where they were before inflation took off during 2021.
The median forecast of the surveyed economists called for the consumer price index to be 2.4% higher in the final three months of 2024 from a year earlier. That would be milder than the inflation of more than 9% that U.S. households suffered during the summer of 2022.
Expectations are split among economists on when the Federal Reserve could begin cutting interest rates, something that can relieve pressure on the economy and act like steroids for financial markets. Some economists think the first cut could arrive during the first three months of 2024, while roughly a quarter of the survey’s respondents think it won’t happen until the last three months of the year.
veryGood! (85)
Related
- TikToker Nicole Renard Warren Claps Back Over Viral Firework Display at Baby’s Sex Reveal
- 3 Trump allies charged in Wisconsin for 2020 fake elector scheme
- Jonathan Scott makes fun of Drew Scott's lavish wedding, teases nuptials with Zooey Deschanel
- AT&T resolves service issue reported across US
- 'Alien: Romulus' movie review: Familiar sci-fi squirms get a sheen of freshness
- Carrie Underwood Shares Glimpse at Best Day With 5-Year-Old Son Jacob
- Watch Live: Attorney general, FBI director face Congress amid rising political and international tensions
- Caitlin Clark's whiteness makes her more marketable. That's not racist. It's true.
- What to stream: Post Malone goes country, Sydney Sweeney plays a nun and Madden 25 hits the field
- Biden’s Chinese Tariffs Could Hamper E-Bike Sales in the U.S.
Ranking
- These six House races are ones to watch in this year’s election
- Trump’s lawyers ask judge to lift gag order imposed during New York trial
- Nebraska woman declared dead at nursing home discovered breathing at funeral home 2 hours later
- Big GOP funders sending millions into Missouri’s attorney general primary
- How 'Millionaire' host Jimmy Kimmel helped Team Barinholtz win stunning top prize
- Gunman captured after shootout outside US Embassy in Lebanon
- NY man charged in sports betting scandal that led to Jontay Porter’s ban from NBA
- FBI investigator gives jury at Sen. Bob Menendez’s trial an inside account of surveillance
Recommendation
-
How a small group of nuns in rural Kansas vex big companies with their investment activism
-
Montanans vote in Senate primaries as competitive general election looms
-
Alec and Hilaria Baldwin announce TLC family reality series
-
New study finds Earth warming at record rate, but no evidence of climate change accelerating
-
Hideki Matsuyama will be without regular caddie, coach after their passports and visas were stolen
-
Iowa will pay $3.5 million to family of student who drowned in rowing accident
-
Kim Kardashian Shares Update on Her Law School Progress
-
Caitlin Clark's whiteness makes her more marketable. That's not racist. It's true.