Spring Market Outlook:
Signs of life... By: Brad Wright, Senior VP of Capital Markets & Agribusiness Lending Credit
The U.S. economy looks to be in the process of rebalancing after experiencing significant volatility over the past few years.
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Spring 2023 — Partners
Real GDP growth ended 2022 with 2.9% growth in the fourth quarter. However, the quarter ended with data pointing to a clear weakening in growth. Notably, consumer spending declined in both November and December, forming a trend indicating that consumer spending could stagnate in the first half of 2023. Despite slight improvements in housing market dynamics in recent weeks, a continued slide in building permits indicates that residential investment will likely remain a significant drag on economic growth. There have also been several positive developments recently that boost the odds that the U.S. economy could avoid a recession. For one, the labor market remains firm as the unemployment rate fell to 3.4% in January, a rate that has not been experienced since 1969. Furthermore, January’s jobs report was delivered with positive revisions to past data that raised the average level of employment over the past few periods and showed a stronger pace of hiring in the final months of 2022. Bearing all this in mind, market participants now expect smaller declines in employment this year than previously assumed.