10 Predictions Around the Job Market and the U.S. Economy for the Coming Year
While there will certainly be some volatility and severe amounts of anxiety, the economy and the job market will be far better than people expect in 2024
Last week’s macro news put yet another exclamation point on what can only be described as a phenomenal year for the U.S. economy. With 6-month annualized core PCE inflation coming in under 2% for the 2nd month in a row and Q4 GDP coming in at 3.3%, combined with unemployment data from earlier this month (holding steady at 3.8%), it’s time for everyone to stop beating around the bush and hedging their bets around the soft landing.
It happened. The flight is over. We touched down with a magnificently blissful landing. Inflation’s been vanquished and unemployment has not budged one iota from where it was in March of 2022 when the Fed started hiking rates.
So enough with the milquetoast hemming and hawing about maybe starting to see the lights on the runway or, even worse, something along the lines of ‘it feels like what we seem to be experiencing might be regarded by some people as something that could potentially be called a so-called soft-landing.’ As absurd as that sounds, it’s not too far off from what people are actually saying these days.
So with the glorious soft landing behind us, the question is - what’s next?
In advance of our non-farm payroll forecast for January that we’ll publish on Thursday when we have complete data for the month, we want to look forward to the year ahead with 10 predictions for 2024 regarding the economy in general and the job market in particular.
We are and will be in a ‘Full Employment’ environment for all of 2024
Unemployment at year-end will be 4%
Wage inflation will settle into a range between 4-5% and stay there
Net job gains for the U.S. will be 1,560,000, an average of 130,000 jobs per month
The power employees and labor gained post-pandemic will ebb only just a bit
Calls for more liquidity in the job market will fall on deaf ears in Washington
There will not be a recession in 2024 but fear and loathing will be severe
The Fed will cut later and less often than the markets expect
The discussion around raising the inflation target to 3% will become normalized
More and more ‘official’ sources of data will be widely recognized as obsolete
And one bonus…
Neither Biden nor Trump will be their party’s nominee in November
Of course, we’ll provide more detail around each of these in subsequent posts and return to them regularly and extensively throughout the year (regardless of whether we’re right or wrong) given the fact that they will undoubtedly be the major themes driving pretty much everything throughout the year but for now, we’ll leave things there and again, we’ll publish our non-farm payroll forecast for January on Thursday.
