By M. Ray Perryman, PhD, CEO and President – The Perryman Group
Overview
The Perryman Group
Outlook for the US Economy – 1st Quarter 2024
By M. Ray Perryman, PhD, CEO and President
The Perryman Group
Employment
The US economy continues to defy the expectations of many, gaining jobs at a surprising pace given the challenges that seem to pop up constantly. Barring a major setback, we should see the expansionary pattern continue (possibly with some bumps along the way). Here’s a brief look at my latest projections for the US economy and factors affecting likely performance.
The number of US job openings remains high, though down from those in the early stages of the pandemic recovery; many industries continue to experience severe shortages. While the major COVID-related dislocations in the labor market have largely eased, long-term demographic trends are pointing toward ongoing challenges for the foreseeable future. Solutions will involve a range of options, such as artificial intelligence (AI), automation, and other capital investments, as well as enhanced workforce training and even childcare availability. Sensible immigration reform (while simultaneously protecting the border) will also be required.
Inflation/Interest Rates
Inflation is not completely tamed, but the economy is in a much better position than a year ago. The last increase in target interest rates by the Federal Reserve was last summer, and we may still see cuts begin in the next few months. The timing of any Fed cuts depends on data being released in the near future, as the Fed remains focused on its dual mandate of promoting maximum employment and stable prices. The most recent job increases, and commodity costs may push back the timeline to some extent, but not for an extended period.
Geopolitical
Situations in the Middle East, Ukraine, Venezuela, the Red Sea, and elsewhere are increasing uncertainty. A major escalation could lead to higher energy prices, supply chain disruptions, and other potential headwinds. We also must confront the quadrennial gyrations of election year politics. Nonetheless, the economy is on much more solid ground than in the not-too-distant past, and the underlying fundamentals sustain moderate expansion.
Economy
The Perryman Group’s most recent projections indicate real gross product is expected to expand by +1.96% this year on a year-over-year basis, with +2.58% growth in 2025. Job gains are projected to be over 2.940 million through 2024, with an increase of more than 2.757 million jobs the following year.
About Dr. M. Ray Perryman and the Perryman Group
Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com). He also serves as Institute Distinguished Professor of Economic Theory and Method at the International Institute for Advanced Studies.