A potential fall recession was the talk of the spring convention circuit. Now with fall just a few months away, that risk hasn’t abated, but it’s also not a given.
During a webinar Tuesday, NTEA’s Steve Latin-Kasper, senior director of market data and research, says entering a recession this year is “about 50/50 at this point.” The economy isn’t booming but it hasn’t cratered either. Inflation has slowed, supply chains and industrial production rates are improving and the service sector continues to expand. Employment levels are steady and hiring rates, while down, are not expected to go negative by most economists, Latin-Kasper says. Political uncertainty exists as a wild card but not one that can be easily forecasted.
The rest of 2023 is unlikely to be a record setter, but it appears a major economic contraction is improbable as well.
“Could we still reach the soft landing the [Federal Reserve] is aiming for — slow growth with no recession — yes, we could,” he says. “We also might have a light or slight recession. It remains to be seen.”
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Latin-Kasper says the U.S. Yield Curve has successfully predicted most recessions over the last 40 years and did indicate at the close of 2022 that a recession could occur in late 2023. But he also notes the Federal Reserve has done a pretty good job controlling and slowing inflation over the last year. And the Fed also will meet Wednesday to consider another rate hike.
