The US economy is resilient but is expected to slow in early 2024

The US economy is resilient but is expected to slow in early 2024

  • The new flagship research report, BMO Blue Book, includes regional economic analysis from BMO experts and forecasts for the U.S. economy

chicago, October 17, 2023 /PRNewswire/ – According to a new report from BMO Blue BookWhile the US economy remains resilient, amid strong monetary tightening, it is expected to slow in early 2024.

the BMO Blue Book Combines the expertise of BMO Economics with the insights of BMO’s commercial bank leaders on the state of the U.S. economy as a whole and in 11 local regions – Northern California, Southern CaliforniaPacific Northwest (Washington And Oregon), Arizona, Colorado, Texas, Minnesota, wisconsin, illinois, IndianaAnd Florida.

“The US economy remains resilient, with real GDP appearing to have risen to an annualized rate of 4.5% in the third quarter from 2.1% in the second quarter. This is not unexpected following the most aggressive path of monetary tightening in four decades,” he said. Michael Gregory, Deputy Chief Economist, BMO. “However, the economy looks set to slow next year. High borrowing costs and rising home prices have reduced affordability to its worst levels in nearly 40 years.”

“It is in many ways a tale of two economies, with the slowdown in consumer spending negatively impacting certain areas of the economy such as retail and consumer finance, while other pockets such as manufacturing and distribution remain positive,” he said. Ray WhitakerPresident, BMO Commercial Bank, U.S. “BMO has helped its business clients navigate all economic cycles for more than 200 years, and we are uniquely positioned to continue helping our clients through these challenging times.”

the BMO Blue Book Covers key areas including:

Northern California:

  • Northern California The economy is calming after a respectable performance in the second quarter. The challenge of housing affordability and the high cost of living continue to be an impediment to stronger economic activity.
  • Companies are focusing on their capital spending and finding new ways to stay lean in the current economic climate.

Southern California:

  • Southern California The economy remains on track for a soft landing in 2024. Leisure, hospitality, education, health care and other services have led job growth in Southern California over the past year.
  • Southern California The country has a resilient and diversified economy, and business performance is good compared to the rest of the country.

Colorado:

  • A sharp increase in interest rates designed by the Federal Reserve starting in March 2022 has put pressure on the state’s housing market. High mortgage rates have reduced affordability and pushed homeowners with low-interest mortgages to stay put, reducing the inventory of existing homes for sale.
  • The strength and flexibility of the labor market has proven to be very beneficial for the country. BMO economists are optimistic about its continued stability. Supported by increased internal migration among other factors, consumer spending also remained steady Colorado.

Texas:

  • Texas The growth rate is expected to improve this year, supported by population and job growth, higher crude oil production, as well as increased investment spending on infrastructure, microchips, and clean energy.
  • Texas Companies have a renewed focus on efficiency. The cost of capital has remained high given the current interest rate environment and improving labor market, and thus, business leaders are optimizing their workforce and investing in technology that creates efficiencies.

wisconsin:

  • the wisconsin The economy underperformed last year, with a slowdown in the manufacturing sector, outside of the auto sector, and a shrinking workforce weighing heavily.
  • Business leaders and managers have been creative, flexible and innovative when figuring out how to deal with high inflation rates and a volatile economy. They have found ways to reinvent themselves with new products and more efficient processes, resulting in strong balance sheets and cash flows.

illinois:

  • the illinois The economy grew modestly below the national average last year, as a shrinking state population limited stronger results.
  • Recent focus on investment in the technology sector in illinois Still very promising. This investment has helped create a large and diversified economy in the state such that stakeholders are no longer dependent on the success of one or two strong sectors anymore.

Florida:

  • the Florida The economy topped the growth leaderboard last year. The country’s real GDP was 4.6%, more than double the national average.
  • Florida It remains the top country for internal migration, due to the great climate, low taxes, and business-friendly environment. Although interest rates are currently high, we are optimistic that they will start to ease soon, providing some relief Florida Business owners regarding their investments and their ability to stimulate economic activity.

To view the full report, visit: BMO Blue Book: Economic and Business Outlook

About BMO Financial Group

BMO Financial Group is the eighth largest bank in north america By assets, by total assets $1.25 trillion From July 31, 2023. Serving clients for 200 years and counting, BMO is a diverse team of engaged employees who provide a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to more than 13 million clients worldwide. Canada, United StateAnd in selected markets around the world. Driven by one goal: to boldly grow good In work and lifeBMO is committed to driving positive change in the world, making progress towards a thriving economy, a sustainable future and an inclusive society.

Source: BMO Financial Group

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