They say a picture is worth a thousand words, so we start with two that explain our outlook for the world heading into 2024 -- a view we think is shared by CEOs of multinational companies who drive the global economy. As we finish up the third quarter of 2023, the US economy is running hot. We expect real GDP growth at 3.5%. That is well below GDPNow at 5.3%, but still well above consensus – and potential. Profit margins remain strong – as all of the recent downturn is accounted for by the Fed, due to its payment of interest to the rest of the financial sector. Correcting for the Fed, profit margins are near their highs – with second quarter profit estimates showing a rebound for nonfinancial firms. We fully expect capitalists to do more of what is working, driving growth for at least another four quarters.
Weekly Economic Report 9.1.23
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