The U.S. economy's performance in the third quarter was marked by robust growth, a theme underscored in a recent speech by Governor Michelle W Bowman at the Utah Bankers Association and Salt Lake City Chamber Banker and Business Leader Breakfast. Amidst the vibrancy, however, certain indicators suggest some moderation, particularly in the area of core personal consumption expenditures (PCE) inflation.
Unveiling the Economic Picture
Delving into the details, the speech, intriguingly titled "Something's Got to Give," painted a comprehensive picture of the U.S. economic landscape. Bowman discussed various economic indicators and factors, including the role of the Federal Open Market Committee (FOMC), the situation of the United Auto Workers, data from the Atlanta Federal Reserve (Atlanta Fed), and the National Federation of Independent Business (NFIB). A Level 5 concern for goods and the implications of the wage growth tracker were also part of the discourse.
The Growth Story
Despite the pandemic's far-reaching impacts, the U.S. economy demonstrated resilience, with employment witnessing significant growth. However, Bowman expressed concerns regarding the true pace of the real economy. A report from S&P Global echoed this sentiment, highlighting different economic growth patterns across regions. From unaffordable homes in 29 states to Guyana's economic transformation due to oil discovery and U.S. retail sales surpassing expectations, the report provided a global perspective.
Looking ahead, the U.S. economy is projected to grow by 2.6% in 2023 and 1.5% in 2024, with an expectation of higher, prolonged inflation. This forecast, as per the S&P Global report, anticipates another rate hike before mid-2024 and a gradual decline in the interest rate thereafter. The implications on labor demand, unemployment rate, real rates, bond yields, and GDP growth shape the long-term economic outlook.
As the economic picture continues to evolve, the various pieces–consumer behavior, interest rates, stock market performance, job growth, and inflation–will play crucial roles in shaping the future. The reports from the Committee for Economic Development offer a broad view of these and other economic policy issues, including infrastructure, labor relations, global trade, fiscal outlook, and technological advancements.