Economy Watch: US View—April 2024

US economic growth entered 2024 on a strong footing. While we forecast that a slowdown in growth is likely, we do not expect a recession. Consumer spending held up well in 2023, but headwinds associated with high interest rates, rising debt, and falling savings are concerning. Trends in income growth will be important this year. The US labor market is resilient, wage growth is elevated, and layoffs are isolated. However, we do expect things to cool somewhat over the course of this year. On inflation, progress on the path to the Fed’s 2% target has slowed. Monetary policy easing will come, but more slowly and with greater cautiousness.