U.S. Dodges Recession in 2023, But Experts Warn of Challenges in 2024

Predictions regarding 2023 were almost unanimous: a recession was on the horizon. As the year draws to an end, the anticipated economic slowdown has not materialized. What then awaits us in 2024? Experts suggest there may still be a chance for an economic downturn.

The forecast is predicated on the same elements that led analysts to expect a decline in 2023. The Federal Reserve has increased interest rates due to the recent surge in inflation.

A recession is defined as two consecutive quarters of negative growth in the gross domestic product. Usually, that dynamic has set off a recession.

Even in 2024, some optimistic estimates can still be avoided. Notwithstanding the dangers to the downside, Bank of America is forecasting a gentle landing as opposed to a recession.

As to a December study conducted by the National Association for Business Economics, 76% of economists stated that they think there is a 50% likelihood or less of a recession in the next 12 months.

The company projects that the second quarter will see the start of this slump, which might be "the mildest in history."

Forty percent of the NABE economists who see a decline in the projection see it starting in the first quarter, while thirty-four percent predict it will happen in the second.

Those in America who have suffered from high costs due to growing inflation could believe that a slump has already begun.

Up to that time, according to a recent MassMutual study, 56% of respondents said the economy was already in a recession.

The end of 2023 brought attention to layoffs, which could continue in the upcoming year. In 2023, 29% of businesses laid off employees; however, 21% of businesses anticipate layoffs in 2024, according to Challenger, Gray & Christmas, an executive and business coaching organization that also specializes in outplacement.

Experts advise following these three steps as a means of being ready for anything unexpected.

Increase Emergency Funds

A small amount of extra cash saved can go a long way toward preventing an unanticipated expense or auto repair from breaking your budget.

However, polls indicate that a large number of Americans would struggle to pay for a $400 bill with cash. Experts advise automating your savings so that the money is withheld from your paycheck entirely.

Cut Down On Loan Balances

According to LendingTree, 34% of customers took into debt over the Christmas season, which is a decrease from 35% in 2022, sources state.

The mean amount those buyers are withdrawing is $1,028, which is much less than $1,549 from the previous year and the lowest since 2017.

However, those loans are more costly due to increased interest rates. According to LendingTree, 30% of holiday borrowers had interest rates of 20% or more.

Try to reduce the amount you pay on any outstanding credit card debt you are carrying from month to month by taking advantage of a 0% balance transfer offer or applying for a personal loan. As an alternative, you may just attempt requesting a reduced interest rate from your present credit card provider.