The latest forecasts from economists show that U.S. economic growth has been revised upwards from previous forecasts over the next year, while the unemployment rate has fallen. It confirmed the view that the Fed will keep interest rates at higher levels for a longer period of time.
According to a monthly survey of economists conducted by Bloomberg, gross domestic product (GDP) is expected to grow at an annualized rate of 1.8% in the third quarter, up from 0.5% in July. nearly quadrupled. Also, GDP in the October-December quarter is expected to increase slightly, rather than falling as it has in the past.
Economists More Sanguine About US Growth Prospects
Change in forecasts suggests world’s biggest economy will skirt recession
Source: Bloomberg monthly survey
The economy is expected to be strong overall, especially driven by consumer spending, which accounts for about two-thirds of GDP. The survey was conducted from August 11-16. 68 respondents. Many responded before the release of U.S. retail sales in July.
U.S. Retail Sales Growth Exceeds Market Expectations in July;
Economists have grown more optimistic that the U.S. can avoid a recession if inflation subsides without major damage to the labor market. U.S. consumers face higher borrowing costs and student loan repayments starting in October, but a healthy labor market is expected to continue to support spending.
The U.S. economy is expected to grow by an average of 2% this year and 0.9% next year, both revised up from last month’s forecasts. It also lowered its unemployment rate forecast by the end of next year while raising its employment outlook.
Higher for Longer
Economists see Fed standing pat on borrowing costs through 1Q 2024, while dialing back rate-cut expectations through September of next year
Source: Bloomberg
Original title:Economists Lift US Growth Forecasts, See Fed Higher for Longer
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2023-08-18 14:59:48
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