Here's a short blurb about the expected future course of the US economy.
Looks like a bit of a slowdown but nothing crazy.
I went to the CBO site -- Congressional Budget Office -- for the latest macro data and forecasts for the U.S. from 2021 to 2026.
Output, as measured by real GDP, grew relatively fast in 2021 and 2022 but it is forecast to grow much slower -- by 2.8% -- in 2023 and then gradually slowing to 1.4% in 2026.
The unemployment rate is predicted to fall from 5.4% in 2021 to 3.5% in 2023. It will then rise to 4% in 2026.
Inflation, as measured by the CPI, hits 6.1% in 2022 but then slows to 2.3% by 2026.
The 10-year Treasury rate increases gradually from 1.4% in 2021 to 3.5% in 2026.
Summary -- looks like a typical demand-induced slowdown with output growing more slowly, unemployment rising, and inflation falling. Interest rates are expected to rise, presumably because monetary policy will be tightening. The changes look pretty marginal and may not be that noticeable to most of us.
Rasing rates further is dangerous and unnecessary. The organized labor has no power to cause the inflationary spiral. The are only some supply side sources of inflation, eg temporary disorder in supply channels as the world attempts friendshoring of critical components. MERRY CHRISTMAS!
ReplyDeleteThanks Val. Merry Christmas to you too!
DeleteWhenever I see forecasts such as these by the CBO, I wonder - how accurate have been their past forecasts?
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