New JP Morgan Report Predicts Mostly Positive 2024 Economic Picture

After a full year of economists predicting that a recession is just around the corner, a new analysis issued by the big financial services firm JP Morgan is suggesting instead that the word “recession” should be replaced with the word “slowdown.”

In a just-issued report forecasting the 2024 economy, strategists for the firm assert that the “lower likelihood of a painful economic downtown,” should bode well for financial decision- making heading into the new year.

The firm’s Outlook 2024 report, while forecasting an early-year slowdown, asserts that “growth should resume in the second half of the year,” while additionally placing the probability of a deep recession at no more than 25%.

The report also predicts that the Federal Reserve may very well begin to cut interest rates during the second half of 2024, adding: “If the rate cuts come in response to normalized inflation rather than a recession, the cutting cycle will likely be slower than what we saw during the early 2000 Great Financial Crisis, and Covid 19 pandemic.”

The JP Morgan thinkers also believe that the increasing presence of Artificial Intelligence in business and everything else may result in a “potential boost in productivity, with governments incentivizing certain industries like financials, airlines, and healthcare.”

Meanwhile, the stubborn topic of inflation will most likely stubbornly remain a topic into 2024, says the report. With the rate of inflation now down from last year’s 8% to around to somewhere between 3.5% and 4%, prospects for it landing somewhere in the range of 2% and 2.5% appear strong.

Says the report: “We are especially encouraged by the recent cooling in inflation rates for services sectors such as hotels and recreation, where prices tend to be stickier.”

With the Federal Reserve additionally tweaking prices, “a normalized labor market and a lower impact of energy price swings on the overall price basket should help keep inflation in check.”

But in the spirit of “on the other hand” economic analysis, the report also notes that while a “continued cooldown in inflation will likely come as welcome news,” there are still “a few inflationary pressure points to keep an eye on.”

Good news, or at least better news, is also seen on the labor front: “The gap between job openings (demand for labor) and unemployed workers (supply of labor) in the United States has shrunk from its peak of over 6 million to close to 2.5 million today.”

This particular trend is in no small way impacted by immigration, adds the report: “An increase in immigration has also boosted the number of available workers. Year-to-date, foreign-born workers accounted for more than 40% of the 3 million plus new jobs in the United States.”

​By Garry Boulard

No Responses

Your comment will be posted after it is approved.

Leave a Reply

Get stories like these right to your inbox. ​Sign up for our newsletter
Archives
Construction Reporter

Show Password Forgot Password?