Economists and CEOs warn the economy will remain on shaky ground in 2023, which could mean another turbulent year for consumers. Here are four things to watch for in the economy in 2023:
this holiday season, but with prices up, they got less bang for their holiday bucks. Despite high-profile layoffs at tech and media companies, unemployment remained relatively low in November, at 3.7%.
“China will eventually learn to live with Covid, but it’s going to be a really rocky path to get there, as we all experienced here, just much earlier,” said Megan Greene, the global chief economist at the Kroll Institute, an economic research firm. The actions have taken their toll on some parts of the economy, like the housing market, but the impact on other sectors will be felt more acutely in 2023, economists forecast.
While Greene, the Kroll Institute economist, believes the worst of inflation is behind the country, she doesn't believe it will be getting close to the Federal Reserve’s 2% target by the end of 2023. As a result, the Fed will be forced to continue raising rates and keeping them high throughout the next year. Ultimately, she expects unemployment will have to rise to 5% before consumer spending slows enough to have a significant drag on inflation.
“Any possibility of a robust activity is simply not there. The question is whether the economy can be slightly above the positive line or will slip slightly under zero to go into a recession,” Yun said. “So I think that is the key question for the U.S. economy.”Helping keep prices stubbornly high has been a shortage of products and materials that has persisted more than two years into the pandemic.