2023 Economic Predictions
The economy faced many hurdles throughout 2022. Between shifting growth and historic inflation, Americans struggled to make their salaries and savings work for them. As 2023 begins, is the economic outlook looking any better? The answer depends on who you ask.
Despite differing opinions, many economists are holding onto hope for the 2023 calendar year. Still, for retirees and investors, it is wise to take caution as you consider opportunities over the next 12 months.
Inflation Predictions
After the astronomical rise of inflation the past year, Americans were relieved to experience a reprieve in the final months of 2022. Experts believe inflation will continue to decline in 2023, hopefully restoring some strength to the individual salary for necessities like groceries, gas, and mortgages.
Price increases will continue to fall off as pandemic-era shortages are corrected. For example, in recent months, bacon, potatoes, and donuts have become cheaper because product and supply chain issues are resolving.
Job Market Predictions
Throughout 2022, the job market remained a beacon of hope in an otherwise dreary economy. With an unemployment rate of 3.7%, the economy for workers is in a good place, but many economists do not expect that to last.
With Fed interference, the job market will likely get shakier in 2023. Some experts predict the unemployment rate to rise to about 5%, even as they expect inflation to continue its downward trend.Stock Market Predictions
In January 2022, the stock market looked terrific, but then it spiraled. The rapid drops and rocky ups and downs throughout 2022 affected the tech industry more than any other. For example, Meta, the parent company of Facebook, experienced a 70% drop last year.
The new year looks like it may be a recovery year for the rocky stock market. The most recent reports show a cooling market.
Housing Market Predictions
The housing market is also experiencing significant changes. Nearly the whole of 2022 saw a decline in home sales and a reduction in home construction, resulting in soaring home prices. Thankfully, the past couple of months saw stabilization. The housing market should make positive changes in the coming months, increasing home sales and buying power.
Recession Predictions
Most banks predict a mild to moderate recession, but some say the U.S. will narrowly avoid a recession this year. Obviously, you need to take predictions with a grain of salt, as many things can change or influence reality.
If you like to remain optimistic, banks like Morgan Stanley and Goldman Sachs believe the U.S. will avoid a recession in 2023. However, both banks explain there is still a chance of a recession, with Goldman Sachs putting it at a 35% chance.
Last year was rough, and 2023 looks like it may be a little better, with a cooling market and lowering prices. Still, a recession is possible, and the job market is uncertain, leaving many Americans fearful of the coming year. Despite the potential for problems, the end of 2022 was much better than the middle, suggesting that 2023 is starting on a decent foundation.