Headline Roundup • January 3rd, 2024
Will the Economy Slip into Recession in 2024?
Summary from the AllSides News Team
How is the American economy expected to perform in 2024?
Downward Pressure: An article in the Washington Examiner (Lean Right bias) concluded that the economy defied the expectations of many economists by avoiding recession in 2023, but the article warned of “much uncertainty for what lies ahead in 2024.” Noting that heightened interest rates take time to impact the greater economy, the piece highlights the possibility that “downward pressure” could hinder economic growth at the start of 2024 and potentially push the economy into recession, albeit an expected “mild one.”
Encouraging Signs: A piece in USA Today (Lean Left bias) acknowledged the “delayed effects” of raised interest rates on economic growth as well as other potential variables that could spell trouble for the economy in the new year, but countered fears by noting other factors “likely to keep the economy afloat,” such as high home and stock prices, expected interest rate cuts, and the continued easing of inflation. The article balanced “encouraging signs” with risks, foreseen and unforeseen, to dismiss worries that a recession is inevitable.
Falling Inflation: An article in the Wall Street Journal (Center bias) deemed signs that global inflation is falling faster than expected to be a “Christmas miracle.” The article cites economic analysts determining that inflation should reach the target of many major banks by the end of the year. This would help economic growth by increasing consumer spending power and potentially leading the Federal Reserve to cut interest rates.
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The post-COVID-19 economy was finally supposed to stop defying gravity and topple into a recession this year.
Instead, the stock market is roaring on the growing belief that the Federal Reserve is on track to wrestle down inflation without causing a downturn, a rare feat known as a “soft landing.”
To be sure, growth is expected to slow amid the delayed effects of the Fed’s aggressive interest rate hikes, the depletion of households’ excess pandemic savings and a pullback in federal government spending.
But other factors are likely to...
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Call it a Christmas miracle: Inflation around the globe is slowing way faster than expected. If economists are right, that gift will keep on giving next year, bringing inflation back to normal levels for the first time in three years.
Goldman Sachs economists estimate that core inflation, which excludes food and energy, in the group of economies that experienced the post-Covid inflation surge—the U.S., Europe and several emerging markets—ran at a 2.2% annualized pace over the three months ended November.
By the end of 2024, average inflation among that group...
The United States avoided a recession in 2023, but the economy is still not out of the woods heading into a 2024 filled with uncertainties.
The Federal Reserve has raised interest rates to highs not seen since before the Great Recession. The Fed’s current rate target is 5.25% to 5.50%, a level designed to tamp down demand and thus inflation. Historically, though, rate-hiking cycles raise the risk of an economic downturn.
As the calendar flipped from 2022 to 2023, a large number of economists predicted that the U.S. would already...
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