ASA’s April Economic Report: 2024 Economic Predictions Aren’t so Reliable Now

From the April 2024 ASA Monthly Economic Report: Q1 2024 was partially stunning to analysts. At one point in the quarter, analysts thought it might have been growing by as much as 3%, but the first reading on Q1 had it come in at 1.6%. This will be adjusted a bit, but it was still a stable reading for Q1. Consumer spending was still a primary driver and government spending carried more weight this quarter. The second quarter is expected to grow at nearly 1% while Q3 could be lackluster at 2%. For the full year, estimates on Real GDP have been pushed up from 1% to at least 2% and perhaps higher if these trends continue.
 

 S&P Global data shows the US near contraction territory with a reading of 50.0 in early Q2. For most of Q1, manufacturing showed some slight expansion, but that has now flattened. Mexico was the only USMCA market still growing based on the latest data. Europe was showing some signs of recovery at the end of Q1, and many Asian markets were ticking up. India was still the fastest growing market in the world. But in the US, new orders are sluggish, input prices are still high (raw materials, component parts, labor, and energy), and selling prices are facing some pressure. Heading through Q2, with global inventories more balanced than in prior quarters, the hope is that global activity will gain some pace and lift all sectors.

The monthly ASA Economic Report is produced by Armada Corporate Intelligence, ASA’s business intelligence partner, and is available as a free member benefit for ASA members through the MyASA portal at www.asa.net/myasa.

Additionally, Armada noted that things can change very quickly. A quick review of the consensus view expressed in 2023 is probably in order. If you go back and look at what the economists thought they would see last year, you would have seen predictions of recession or near recession numbers from the first quarter through the year. This never happened. Quarter after quarter the data showed growth. The consensus shifted and a new one emerged. Now the analysts were confident there would be no recession or major slowdown in 2024. The first assessment in 2023 was a hard landing, and then it seemed more likely that a soft landing would emerge, and just last month the assertion was no landing at all.

The report also answers a reader’s question of the month: Has the Interest Rate Conversation Changed?

Again, ASA members can access the Monthly Economic Report through the MyASA portal at www.asa.net/myasa.