Feb 26, 2024 - Economy

Economists see much stronger 2024 growth: NABE survey

Illustration of a rocket made of money, on fire, shooting into the sky.

Illustration: Aïda Amer/Axios

An influential group of economists has "sharply revised upwards" America's 2024 growth expectations in what could be another year that stuns forecasters.

Driving the news: As the U.S. economy continues to outperform, the National Association for Business Economics — which has conducted semi-regular surveys of professional forecasters since 1965 — is the latest to say the economy won't see a sluggish year.

  • The NABE survey released Monday expects stronger growth, low joblessness and cooling inflation — the components of an economic "soft landing."
  • The median forecast for GDP is nearly a full percentage point higher than that expected just two months ago. It's now 2.2%, compared to the 1.3% expected in December.
  • That includes much stronger growth for the current quarter — an annualized 2%, not the 0.7% previously forecast.

Why it matters: A flourishing job market and expectations the Fed will lower borrowing costs at some point this year are among the factors underpinning more optimistic economic forecasts across Wall Street.

  • Earlier this month, for instance, Deutsche Bank nixed its call for a mild recession in 2024. It penciled in roughly 2% growth this year, a sharp upgrade from its previous forecast of just 0.3% growth.
  • Last week, the Conference Board also ditched its expectation of a recession.

Flashback: Last year, many economists were overly pessimistic about an economy that ultimately boomed.

  • Now, many analysts — including those at NABE — aren't expecting gangbuster growth. Instead, they foresee a steady, healthy economy that's a long way from tipping into recession.

What they're saying: "The stronger February growth forecasts for 2024 result from upward revisions to key sectors of the economy," including consumer spending, corporate investment and homebuilding, Ellen Zentner, chief economist at Morgan Stanley and NABE president, said in a release.

  • "[M]ore than three-quarters of the panelists forecast that the U.S. economy is heading for a soft landing in 2024," said Mervin Jebaraj, a professor at the University of Arkansas and member of NABE.

The median forecast for unemployment will average 3.9% this year, lower than the 4.2% in the last survey.

  • On inflation, the median projection sees the Fed's preferred gauge of inflation increasing 2.1% over the year.
  • The group expects the Fed will cut interest rates more than previously thought, with the majority of panelists anticipating the first cut in June.

What's next: Some 40% of the economists surveyed said the biggest risk to the economy was keeping monetary policy too tight for too long.

  • A similar share cited stronger worker productivity — perhaps fueled by AI innovations — as the economy's largest upside.
Go deeper