The US economy still faces real risks and challenges, from the Israel-Hamas war to the least affordable housing market in a generation. And yet there are tangible reasons to be optimistic about the economy in 2024, forces that are easier to see than they were a year ago.
‘Remarkable’ inflation cool-down
Many on Wall Street and in Washington expected inflation would cool after hitting four-decade highs in June 2022.
Declaring victory over inflation
Inflation has cooled so much the Fed has halted the monster-sized rate hikes that threatened to derail the economy and freaked out investors.
Fed officials are now even penciling in rate cuts for 2024, an outcome which would represent declaring victory in the war on inflation.
Blockbuster year for stocks
Cooling inflation, fading recession fears and looming rate cuts fired up Wall Street.
‘Extraordinarily low’ layoffs
Despite the Fed’s rate hikes, the unemployment rate is sitting at just 3.7%, near a half-century low.
Paychecks over prices
For much of the economic recovery from Covid-19, prices have increased faster than paychecks, which means real wages, adjusted for inflation, shrank.
However, the trend has started to shift recently, with paychecks catching up to inflation. Source: CNN
