Economic Outlook Analysis by Global Experts

The U.S. economy is showing signs of strength, with over 5% growth in the third quarter of 2023. However, consumer headwinds are emerging that could potentially disrupt a soft landing. Despite this, experts believe a recession in 2024 is unlikely, but there are downside risks for GDP and upside risks for inflation.

Inflation data is on track, but consumer spending has been revised down, leading to concerns about the impact on the labor market. Real income growth is slowing, and consumers are feeling the pinch from high gas and food prices, as well as high debt rates. Despite these challenges, the labor market remains strong, with low unemployment rates and rising payrolls.

The Federal Reserve is expected to make adjustments to prevent a hard landing, with potential rate cuts in 2024. The balance between rate policy and balance sheet policy will be crucial in determining the impact on the economy. Geopolitical risks, such as conflicts in the Middle East and between Russia and Ukraine, could also affect the market.

In Canada, the economy is softening, with per-capita GDP growth declining for five straight quarters. Inflation growth has been slowing, and further interest rate hikes are unlikely. The Bank of Canada is expected to be cautious in its approach to monetary policy, with a potential cut in interest rates on the horizon.

In Europe, growth is expected to remain subdued in 2024, with inflation dropping more sharply than wage growth. The labor market is showing signs of cooling, but unemployment rates remain low. Central banks are expected to continue their efforts to bring inflation back under control.

In Australia, activity is expected to soften in 2024, with GDP growth running below trend. The Reserve Bank of Australia has been slow to respond to the inflationary cycle, but monetary policy is now restrictive. The labor market is starting to show signs of loosening, which could impact consumer spending and confidence.

Overall, the outlook for the global economy in 2024 is mixed, with challenges and uncertainties in various regions. Investors are advised to remain vigilant and patient in navigating the changing economic landscape.