Moody's spreading the love in nearly simultaneous research report releases.
Moody’s lowers US economic growth forecasts for 2022-23:
- now expects US real GDP growth of 2.1% in 2022 and 1.3% in 2023, down from its May forecasts of 2.8% and 2.3%, respectively
- Tighter monetary and financial conditions to reduce stubbornly high inflation will slow economic growth
- While Moody's expects inflation to trend down as growth weakens, it will still remain elevated, dropping from 9.1% in June to 7.0% by the end of 2022 and to 2.3% by the end of 2023. At the same time, Moody's forecasts unemployment will rise slightly above 4% in 2023 from the current low level of 3.6%, owing to a combination of slower hiring and increasing labor force participation.
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AND, not leaving out Europe.
Moody's lowers European growth forecasts amid energy crisis
- "Our baseline forecasts assume that persistently high energy prices and broad-based inflation will continue to squeeze real incomes and dampen consumption spending as the energy crisis drags on,"
- Moody's baseline forecast for the euro area is for real GDP to grow 2.2% in 2022, followed by 0.9% in 2023, down from its May forecasts of 2.5% and 2.3%, respectively
- The main factors driving the lower growth projections are: gas supply interruptions and uncertainty that will require adjustment on the demand side; high inflation, which is denting consumer spending; withdrawal of monetary policy support by the European Central Bank (ECB); tighter global liquidity; and subdued external demand. There are substantial downside risks to Moody's forecasts should Russia completely shut off gas flows to Europe.
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That's some dour stuff from analysts at the agency.
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