Hard Numbers

America’s economy in 2023 provided a lesson in humility for forecasters. Before the year began, almost all predicted that it was heading for sluggish growth at best, and a recession at worst. The logic was simple: beating inflation was bound to be painful. Instead, America powered ahead at an annualised pace of roughly 2 per cent growth, even as inflation receded.

This has persuaded many analysts to ditch their gloom. Their median forecast heading into 2024 is that America will avert a recession and get price pressures under control. This would qualify as a “soft landing” after the inflationary scare of recent years. But, given how wrong many were about 2023, it is worth asking if the same is possible about 2024. Three dangers stand out.