WHERE IS THE REMAINING RECESSION RISK COMING FROM IN 2H 2023?
Soft Landing Grows Increasingly Likely
- Goldman Sachs’ cut their estimated likelihood of a recession to just 15% in September
- Both August inflation and labor market data supports the idea that a soft landing is plausible
Eyes Are On Consumer Spending and The Banks
- A pullback in consumer sentiment combined with the resumption of student loan payments could reduce discretionary spending significantly
- Companies face the same financing challenges as CRE investors, potentially limiting corporate spending once business loans are renewed
2024 Forecasts Expect No Recession Will Occur in 23/24
- Most economic forecasts are projecting GDP growth near 2% in 2023, and near 1% in 2024
- Slow but stable growth is exactly what the Fed wants, and would reduce upward pressure on interest rates
*Sources: Marcus & Millichap Research Services, Goldman Sachs
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