Where is the Remaining Recession Risk Coming From in 2H 2023?

Written By Marc Nicholson

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

Marc Nicholson
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