Summary points from JP Morgan's 2024 US Economic Outlook
- The economy easily avoided recession in 2023, but labor market activity has been slowing
- We look for momentum to slow further into 2024 as growth slips below trend...
- ...and the economy walks a fine line between expansion and contraction
- Drags from monetary policy will persist, and in some cases build, into 2024
- We expect fiscal support from recent years will turn to a modest fiscal drag in 2024
- We see real GDP up 0.7% in 2024, down from near-3% in 2023 (%q4/q4)
- Job growth is expected to slow, and the unemployment rate to continue its recent upward trend
- Wage inflation should moderate further next year in a softer labor market
- Inflation trends are already cooling: a softer labor market should bring more moderation
- Core PCE inflation to be up 2.4% in 2024. down from 3.4% in 2023 (%q41 q4)
- With slowing job growth, and further disinflation, we think the FOMC will stay on hold for a while
- FOMC to start lowering rates in H2 of 2024 to avoid a recession, with inflation close to, but still above, target
