Recruiting Resources, Inc.’s Post

So where are we now??? • The global economy is expected to grow by 5.9% in 2023, the fastest pace since 1973, driven by the reopening of businesses, the pent-up demand, and the fiscal support • The U.S. economy is projected to expand by 6.4% in 2023, the highest rate since 1984, as the vaccination program reaches 70% of the adult population by July and the consumer spending rebounds • The U.S. midterm elections are likely to result in a divided government, which could moderate the scope and pace of the policy changes proposed by the Biden administration, such as the corporate tax hike, the capital gains tax increase, and the social spending package • The Federal Reserve is expected to maintain its accommodative stance and keep the interest rates near zero until 2024, while gradually tapering its asset purchases starting from late 2023 or early 2024 • The inflation is expected to rise temporarily in 2023 due to the base effects, the supply chain disruptions, and the higher commodity prices, but to moderate in 2024 as the output gap closes and the labor market slack diminishes • The equity markets are expected to deliver positive returns in 2023, supported by the earnings growth, the dividend recovery, and the share buybacks, but to face some headwinds from the higher valuations, the policy uncertainty, and the geopolitical tensions • The fixed income markets are expected to offer low but positive returns in 2023, as the yield curve steepens, the credit spreads tighten, and the duration risk increases • The alternative asset classes, such as real estate, private equity, and hedge funds, are expected to provide diversification benefits and enhance the risk-adjusted returns in the portfolio https://lnkd.in/e2uXfdsv

𝗨.𝗦. 𝗘𝗰𝗼𝗻𝗼𝗺𝗶𝗰 𝗢𝗽𝘁𝗶𝗺𝗶𝘀𝗺 𝗦𝘂𝗿𝗴𝗲𝘀: 𝗜𝗺𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀 𝗳𝗼𝗿 𝗙𝗣&𝗔 𝗮𝗻𝗱 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻𝘀 The latest Wall Street Journal quarterly survey reveals a significant shift in economists' outlook on the U.S. economy. The probability of a recession in the next year has plummeted to 29%, the lowest since April 2022, as economists now expect the economy to continue growing, with inflation-adjusted growth bottoming out at 1.4% in Q3 2024. This optimism comes despite the Federal Reserve's aggressive interest rate hikes, with the U.S. economy exceeding expectations over the past 18 months. Economists have revised their forecasts, estimating 2.2% growth in Q1 2024, up from 0.9% in January. The overall sentiment is that the U.S. economy is outperforming expectations. This updated economic outlook necessitates several adjustments for Financial Planning & Analysis (FP&A) professionals. Forecasts must be revised to account for the more optimistic growth projections and lower recession risks. At the same time, interest rate assumptions need to be adjusted to reflect expectations of fewer rate cuts and higher long-term rates. FP&A teams should engage in robust scenario planning, closely monitor costs, and allocate capital toward growth initiatives. The more stable economic environment and improved growth outlook will also likely positively impact business valuations. Reduced recession risk, higher growth expectations, and increased investor confidence may lead to higher valuation multiples. While the effect on valuations may vary by industry, companies well-positioned for long-term growth in sectors sensitive to economic fluctuations could see a more significant positive impact. FP&A professionals and valuation experts must consider company-specific performance, industry dynamics, and market sentiment when assessing the impact of the updated economic outlook on individual business valuations. Reference: Goldfarb, S., & DeBarros, A. (2024, April 15). 'Envy of the World'—U.S. Economy Expected to Keep Powering Higher. The Wall Street Journal. Retrieved from https://lnkd.in/gkJsF_7n

“It has been two years since forecasters felt this good about the economic outlook.” That was the first line of the article summarizing the latest The Wall Street Journal economic survey. Looking into the details, this survey showed more broad-based optimism than I've seen in a quite a while. Of course, a stronger economy also leads to expectations of higher inflation and a longer wait for interest rate cuts. Some notes from the survey: -Only 10% thought the economy would experience at least one quarter of negative growth in the next 12 months. That’s down from 33% in January. -Three interest rate cuts are expected this year, down from four to five in January’s survey. Half of economists surveyed in January thought the first cut would happen by May 1. Now, it's 54% think the first cut will happen June 11/2 and 84% by July 30/31. -The average monthly increase in jobs the next 12 months is double the expectation from just a few months ago. It is now at an average of 129k jobs added per month compared to the 64k forecast at the beginning of the year. If it turns out to be accurate, that’s great for absorbing the #multifamily supply hitting the market. Also, that number is the highest jobs outlook since the July 2022 survey. Link to article -> https://lnkd.in/gsPeZvyu Radix

The numbers each quarter have been revealing a US Economy that is continuing to grow and strengthen. What does this mean for businesses in 2024? Read on... #2024economy #chiefexecutive https://lnkd.in/eX7tVPav

The fiscal policies implemented during the pandemic recession helped individuals and firms survive some of the most perilous times in more than a century and helped keep the economy going during the recession. However, many individuals could not spend the funds due to lockdowns and supply chain disruptions, pushing the personal savings rate higher than 30% during the early stages of the pandemic. Click here to read an in-depth analysis of the economy post-pandemic: https://bit.ly/49XXQrS

The latest quarterly survey by The Wall Street Journal paints a rosy picture of the economic landscape, with economists expressing unprecedented optimism. Recession probabilities have hit a two-year low, and growth forecasts are on the rise. Despite concerns about inflation, experts believe the U.S. economy will continue to thrive, fueled by strong productivity and steady growth. #USEconomy #EconomicOutlook #Recession

Interesting read on how well the economy is doing vs what some people say it’s doing

The U.S. economy appears to have achieved a soft landing—but what comes next? Check out the latest market commentary and let's connect.

The recent employment report in the U.S. has had several significant effects on the economy and financial markets: Stronger Economy: The data suggests a stronger-than-expected economy, leading some investors to accumulate riskier assets. Market Concern: The report also raised concerns about potential interest rate hikes by the Federal Reserve, prompting investors to unwind positions in riskier assets. Unwinding Carry Trade: The perception of increased risk and potential interest rate hikes has led investors to unwind carry trade positions, increasing market volatility. Portfolio Rebalancing: Investors are adjusting their portfolios to reflect new growth and risk expectations. It's crucial to differentiate between recession and crisis: Recession: A slowdown in the economy, not necessarily a catastrophic situation. Crisis: A significant disruption in financial markets and a sharp decline in economic activity with long-lasting and severe effects. The frequent use of the term recession as a synonym for crisis can be misleading. It's more accurate to view a recession as a phase in the economic cycle that doesn't always imply a deep crisis. In summary, the current market adjustments reflect changes in economic and risk expectations but do not indicate an imminent crisis.