Now that a new year is beginning, it’s a good time to look back at the performance of the U.S. economy in 2023. Much has happened in many areas impacting financial success, and we might be able to glean some insight into the coming year based on what we’ve seen in the previous 12 months. Let’s take a look at the state of the economy and look forward to 2024.
The U.S. economy today
Despite strong forecasts early in the year that the U.S. was headed for an almost-certain recession, that prediction now appears to have been skirted, replaced by optimism for a “soft landing”… at least for the immediate future. Real GDP and consumer spending have continued to grow and stocks have rallied throughout the year. With the Federal Reserve likely done bumping interest rates, inflation will continue to ease. The strong labor market resilience has also contributed to a more optimistic outlook.
However, the effect of many pandemic-related factors such as federal financial assistance, low borrowing rates, increased salaries and pent-up demand will eventually begin to erode. Plus, high government spending is helping the economy now, but the longer-term effect of the sharp increase in the federal deficit remains to be seen. In the end, the economy likely will not be resilient forever, meaning the predicted recession may simply have been delayed rather than averted.
What we could see in 2024
2024 will be a U.S. presidential election year, so a lot may be up in the air. The chair of the U.S. Federal Reserve expects inflation to continue to reduce based on the positive direction it is currently taking, potentially dropping below 2.5% by the end of the year. However, the economy as a whole may see some slowing, particularly in the first half of the year, due to the Fed’s tight monetary policy measures. Overall, the Fed projects U.S. GDP growth of 1.5% in 2024, although some economist predictions are a bit more conservative.
Fenestration forecast for 2024
The Fenestration and Glazing Industry Alliance's May 2023 U.S. Industry Statistical Review and Forecast predicted that the overall new housing market is expected return to growth of 8% and 7%, respectively, in 2024 and 2025. The demand for residential prime windows is forecast to see growth of 5% and 4% in 2024 and 2025, respectively. Growth in the new construction demand for entry doors is also expected to see growth in those years. The patio door market is expected to grow by 5% and 4% in 2024 and 2025, respectively.
Conclusion
The only thing truly clear at this point is that no one has a crystal ball to predict the future of the U.S. economy. For now, it seems the U.S. can stop holding its collective breath since recession no longer appears to be imminent, although it would be wise to plan for an overall economic slow-down in 2024.
