Bank of America has revised its forecast for the US economy, moving away from the mild recession it had previously predicted.
In a recent research paper, the bank’s experts amended their prior predictions of a moderate economic slump in the first half of 2024.
Bank of America Forecasts Gentle US Economic Landing
In light of their most recent study, they now anticipate a gentle landing for the US economy rather than a recession, with economic growth briefly deviating from the norm but remaining positive.
Our adjustments mean we no longer predict a mild recession and, instead, believe the economy may be able to skirt one, according to the research note, which noted the shift in outlook. The paper still kept a cautious tone, pointing out that the economy still confronts uncertainty and that a little recession is still a possibility.
The modification by Bank of America is in line with remarks made by Federal Reserve Chair Jerome Powell, who said last week that the central bank’s staff no longer forecasts recessions.
The Federal Reserve no longer forecasts an outright recession owing to the economy’s recent resiliency, even if it projects a notable slowdown in growth beginning later in the year.
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GDP Growth and Lower Inflation
Positive macroeconomic indicators for the US economy have preceded this shift in the economic outlook. The gross domestic product (GDP) increased at a pace of 2.4 percent in the second quarter of 2023, above the 1.8 percent rate that experts had first predicted.
Additionally, after hitting record highs the summer before, inflation has been trending lower. The lowest yearly rise in more than two years, a 3 percent increase in consumer prices in June, was recorded.
Although it seems that a recession is not imminent for the US economy, continued awareness and adaptation are nevertheless crucial for navigating any future difficulties and sustaining steady economic development.
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