We break down timely topics, centered on the major economic events around the world and their impacts to financial markets, in order to help you simplify client conversations around important investing decisions.
Last week was a slow week for economic news and data. Fed Chair Jerome Powell restated his prior stance that the door remains open for more rate hikes if inflation and the economy do not slow meaningfully but added that the Fed will be cautious when considering policy decisions at next month’s FOMC meeting. On the data front, consumer sentiment fell again, hitting a six-month low and nearing its lowest reading in a year.
The resilient economic readings in September indicated a strong hand-off of activity heading into the fourth quarter, but the momentum for consumers and businesses is fading as the end of the year approaches. Financial conditions have tightened appreciably in recent months while cost pressures are building for many households — sapping much of the spending power generated by still solid hiring and income trends.
Ben Brewster, Nationwide’s Vice President of Government Relations, and Kathy Bostjancic, Nationwide’s Chief Economist, share their insight and perspectives on recent domestic and geopolitical events. What did we learn from this week's election results? How realistic is a government shutdown? How could recent geopolitical events impact the U.S. economy?
Real GDP growth accelerated sharply in the third quarter as consumers spent broadly and the economy continued to defy expectations. How long can consumers keep this up? How does the strong GDP report alter our outlook for a recession in 2024? Senior Economist Ben Ayers and Financial Market Economist Oren Klachkin discuss third-quarter growth and our outlook for the months ahead.
Consumers finished the third quarter strong as the still solid labor market continues to support spending, especially on services. But households are cutting deeper into personal savings and adding to debt, not a sustainable path for spending to remain buoyant in coming quarters. Headwinds for near-term activity are building, including rising interest rates, the resumption of student loan payments, emergent geopolitical concerns, and the potential for a federal government shutdown. This should result in significantly slower economic growth over the fourth quarter, a likely forerunner to a mild recession in the first half of 2024. The strength of recent economic data may even increase the odds of a recession as it reinforces a higher-for-longer rate path from the Fed into the new year.
In this two-part podcast, Chief Economist Kathy Bostjancic and Senior Economist Ben Ayers discuss soft landings and the likelihood of one in the next year. What is a soft landing, how does it differ from a recession, and how likely could it happen?
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