Staff Reports
The United States has narrowly avoided a recession in the year 2023, much to the relief of President Biden and his administration. The Congressional Budget Office released new economic projections on Friday, revealing that the country’s economy will continue to grow in 2024, albeit at a slower pace.
Economy will slow but avoid recession in 2024, contends Congressional Budget Office https://t.co/16nrDNfurr
— The Washington Times (@WashTimes) December 15, 2023
According to the CBO, real gross domestic product (GDP) is projected to expand by 1.5% in 2024, down from the 2.5% growth experienced this year. This slowed growth is being attributed to weaker consumer spending and commercial construction, which are concerning indicators for the state of the economy under President Biden’s leadership.
Unemployment rates are expected to increase slightly, rising from the current 3.9% to 4.4% by the end of 2024 and remaining at about that level in 2025. The CBO anticipates that the workforce will experience moderate growth, largely fueled by new immigrants entering the labor market.
In what could spell trouble for President Biden as his re-election approaches, the CBO projects that the economy will only add 45,000 new jobs per month near the end of 2024. This sluggish job growth could be a major point of contention for voters evaluating the president’s economic performance.
On the upside, the softer labor market is expected to slow inflation, with the rate projected to be at 2.1% next year. This is close to the Federal Reserve’s 2% target and is seen as positive news for President Biden, who has faced criticism over the previous period of high inflation during his tenure. However, inflation is expected to rise again in 2025 as the economy picks up, according to the CBO’s projections.
The fact that the U.S. managed to steer clear of a recession in 2023 is being hailed as a remarkable feat. Economists at Bloomberg had previously placed a 100% probability on a recession occurring in 2023, making the avoidance of a downturn all the more significant.
Despite the somewhat positive outlook, the CBO’s projections still indicate a slowdown in real GDP growth. In the current quarter, real GDP growth is at 0.8%, and this figure is expected to increase to 1.3% in the first quarter of next year before rising to 1.7% on an annualized quarterly basis by the end of 2024.
Overall, the CBO’s projections paint a mixed picture for President Biden and his efforts to oversee the country’s economic growth. With slower GDP expansion, tepid job creation, and inflationary concerns on the horizon, the administration will need to navigate these economic challenges as the 2024 presidential election looms closer.
