ARLINGTON, Va.–At the beginning of this year there was a general consensus among economists both inside and outside of credit unions that the latter half of 2023 would see a mild recession. Now, one CU economist says that seems unlikely, and a recession in 2024 remains an uncertainty, as well.
Curt Long, chief economist with NAFCU, noted that many economists with the larger economic firms have been adjusting their forecasts when it comes to a recession, dialing back their earlier predictions.
“I think that generally matches what we see, as well,” said Long. “…Now we’re on the other side of the debt ceiling crisis, if you will, that did look like a candidate that could plunge the economy into recession, that threat has been avoided,” said Long. “I think it’s a similar story with the banking sector stresses. Obviously those stresses still remain, but it doesn't seem like failures that those banks have spread, at least immediately. So, I think those two things have contributed to a more positive outlook over the rest of the calendar year.”
‘A Lot of Uncertainty’
Long added, however, that there remains a “lot of uncertainty over the remainder of 2023 and 2024 and the likelihood of a recession will be affected by where inflation stands as the new year gets under way, in addition to where labor markets stand. Those two factors will primarily drive Fed policy, Long stated.
“All of those pieces are very uncertain at this point,” Long said. “I still see a lot of confident assertions that a recession is coming in 2024, but that's not our view. Our view is it's very uncertain, but through the rest of 2023 the probability of a recession has (gone down) pretty considerably in the last several weeks.”
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