The U.S. economy remains robust and resilient amid record tightening monetary policy cycle, but the latest data shows some signs of cooling off, that is economic growth likely slowed to its weakest pace in a year and a half to end 2023, possibly setting the stage for a more pronounced slowdown ahead.
The consensus outlook for the fourth quarter is that GDP grew at a 2% seasonally adjusted annualized pace, sliding downward from the 4.9% in Q3 and the lowest reading since the 0.6% decline in the second quarter of 2022.
As the report hits the markets, the investors’ attention almost immediately will turn to what the signs are for growth going into 2024. The report likely will "represent a sharp deceleration" from the previous period, and incoming data continue to point to a resilient, but cooling U.S. economy, led by consumer spending on the back of a tight labor market, higher than expected holiday spending, and moderately strong balance sheets.
FORESIGHT has a below-consensus view that GDP — the sum of all goods and services produced during the period — will slow to a 1.5% pace, largely because parts of the economy not directly related to consumer spending, such as nonresidential business fixed investment and housing, will tail off.
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