Arrows indicating economic and market trends. Inflation: green arrow pointing down (slowing enough to accommodate interest-rate cuts by the Federal Reserve). GDP growth: yellow arrow pointing down (economic activity to slow). Wage growth: yellow arrow pointing up (steadying real wage growth remains at, or above average). Unemployment: green arrow pointing up (historically low, but drifting higher by year end). Consumer confidence: yellow arrow pointing down (moderated by worries over household budgets, recession, and finances). Volatility: yellow arrow pointing up (expected to move higher over economic growth and credit-quality concerns).
Source: Wells Fargo Investment Institute, as of March 31, 2024. Subject to change. GDP = gross domestic product.
Key Takeaways
- The U.S. economy faces risk of an economic slowdown because of household budget and financial pressure, elevated interest rates, and softening conditions in the labor market.
- Monetary restraint is reinforcing a reduction in fiscal stimulus, curtailing economic growth. Catch-up hiring to counter recent labor shortages is keeping job gains healthy but slowing with economic growth.