Economy Watch | United States

Economy Watch: US View (July 2023)

July 14, 2023

The Conference Board forecasts that economic weakness will intensify and spread more widely throughout the US economy over the coming months, leading to a short and mild recession. Consumer spending has osculated between growth and contraction in recent months. Looking ahead, we expect this trend to worsen as households grapple with rising rates, inflation, debt repayment and other factors. US labor markets continue to show strength. While the degree of tightness is moderating, we don’t expect to see job losses are unlikely to materialize in the immediate future. On inflation, progress is being made, but more work remains to be done. We forecast a Fed hike of 25 bps in July and perhaps one more in Q3 2023. No rate cuts are likely until Q2 2024, in our view.