20231201-招银国际-2024_US_Economic_Outlook_Between_a_soft_landing_and_a_mild_recession_15页_1mb

The US economy performed strongly in 2023, exceeding expectations largely due to high household and business spending sustained by aggressive policy rate hikes, despite a less synchronized slowdown across sectors. However, a mild recession is projected for 2024, driven by continuous credit tightening, weakening employment, fiscal consolidation, and exhaustion of excess savings. Key risks include a potential output decline in real GDP, slowdown in consumption and housing sales, and drag on business investment as policy stimulus fades.

Key economic indicators for 2024 include an estimated real GDP growth of 0.8% (lower than the 2.3% in 2023), driven by resilient consumer spending that could slow to 0.8% from 2% in 2023 due to job market cooling and credit constraints. Inflation is expected to further decline to 2.4% in 2024, attributing to falling rents, wage growth moderation, and base effects. The Federal Reserve may initiate rate cuts of around 150 basis points starting in May or June 2024, leading to a potential 5% decrease in the USD index.

Sectoral analysis highlights consumption slowing due to tighter household credit and wage growth declines, despite initial resilience from strong employment and excess savings. Real estate faces moderate decline, with housing sales potentially improving but unlikely to see a new boom cycle as mortgage rates remain high. Business investment growth is expected to moderate from 3.3% in 2023 to 1.8%, impacted by cost pressures and fading policy effects. Exports are forecast to decrease, while imports grow slightly, supported by global economic picks.

Monetary policy suggests a cyclical Fed rate cut path to encourage inflation control, while fiscal policy tightens due to reduced government spending and deficit constraints, potentially reducing GDP growth by 0.6ppt in 2024. The analysis underscores low recession risk from strong real sector balances and a healthy banking system, but risks persist from economic uncertainties and global events.