JPMorgan Renounces Recession Forecast
(7 August 2023 – United States) JPMorgan economists have cancelled their call for a US recession in the US, anticipating the US economy will avert what was once pitched as an “inevitable downturn”.
Matching BofA and Goldman Sachs in officially reducing or reversing their forecasts for an economic downturn for two consecutive quarters, JPMorgan now predicts continued expansion in 2023 and modest growth in 2024 as the most likely scenario. The bank had previously reported that it projected a recession to begin in 2023,
JPMorgan expects US GDP to grow at a healthy 2.5 percent per annum pace in Q3 2023, followed by 1.5 percent in Q4 2023. The unemployment rate will still climb to 4.5 percent by the end of 2024 compared to the current exceptionally low rate of 3.5 percent.
“The likelihood of a contraction has diminished in recent months, A relatively quick resolution of the debt ceiling has taken one type of financial crisis risk off the table while regulators implicit guarantee of bank depositors has vastly reduced the odds of a different type of financial crisis risk. We are flagging the rising possibility of healthy non-inflationary growth thanks to potential productivity gains from artificial intelligence and a pickup in labour supply” commented JPMorgan Chief US Economist, Michael Feroli.
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