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 (the pace of economic activity slowing). Wage growth: yellow arrow pointing up (real wage growth is slowing but still a plus for the consumer). Unemployment: green arrow pointing up (historically low, but drifting higher by year-end). Consumer confidence: yellow arrow pointing down (hurt by worries over jobs, inflation, and household finances). Volatility: yellow arrow pointing up (expected to move higher over economic growth and credit-quality concerns).
Source: Wells Fargo Investment Institute, as of June 30, 2024. Subject to change. GDP = gross domestic product.
Key Takeaways
- The U.S. economy is entering a slowdown because of household financial pressure, inflation worries, elevated interest rates, and softening conditions in the labor market.
- Economic growth is facing a headwind from reduced fiscal stimulus and from reduced catch-up hiring propelling job, income, and consumer-spending growth in recent years.