Will the US Get Hit with a Recession in 2024?

Experts debate the likelihood of a 2024 US recession, analyzing factors like the yield curve and consumer confidence. Predictions vary, with a focus on interest rates and tech layoffs impacting the economy’s future.

By Brad Nakase, Attorney

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Many experts are predicting that the US is likely to get hit with a recession in 2024, so the question on everybody’s lips is when will the recession hit? Let’s take a look at the circumstances currently affecting the economy to see when the recession is likely to hit and what kind of impact it is likely to have on the US economy.

Why Do Experts Think a Recession will Hit in 2024?

Economists look at a number of factors when predicting the likelihood of the US economy going into recession. One of the factors they look at is the yield curve. The yield curve is the relationship between short-term and long-term investment yields. When there is an inverted yield curve, it means that consumers believe that short-term investments are riskier than long-term investments. This indicates a short-term lack of consumer confidence, which is a fairly good predictor of a recession. It is not 100% accurate, but it is seen as one of the best predictors of a recession because it tracks consumer sentiment. Currently, the yield curve indicates a 61% likelihood of a recession hitting the US in 2024.

But when will the recession hit?

It is difficult to say exactly. The Federal Reserve has been increasing interest rates in order to reduce inflation. Sometimes, that can trigger a recession. Economists are mixed on whether this will or won’t cause a recession. However, it is a factor at play.

Another factor that could cause a recession is the recent tech layoffs and corporate defaults that have been sweeping the US. Increased unemployment rates are both a symptom of a recession and a cause of recession. So far, many of the laid-off tech professionals have found other jobs, so luckily, the layoffs haven’t impacted the US unemployment rate.

Consumer debt in the US has also hit an all-time high of $17 trillion dollars. This paired with high interest rates seems to indicate that the answer to when will the recession hit is soon. 84% of US CEOs are anticipating a recession will hit in the next 12 months. Economists are split, with only 48% saying that a recession will hit the US in 2024.

Will the 2024 Recession Be a Bad Recession?

The good news is that the economists who are predicting a recession in 2024 are predicting that it will be a mild recession. The Federal Reserve is on track to hit its goals for inflation, and therefore, it will soon level out the interest rates, which will put less pressure on the economy.

Consumers are cautious, but they are still borrowing money for spending. We would expect consumer spending to slow considerably ahead of a recession. So far, demand is still high enough that companies are keeping up with their usual levels of production.

There is always the possibility that unexpected circumstances could cause the recession to hit sooner or worsen the impact of the recession. There are wars in Europe which could threaten supply chains, but so far the impact to US production and imports has been minimal.

Any predictions made about when will the recession hit or how bad will the 2024 recession be are educated guesses. Economists look at historical patterns and the circumstances to make predictions, but there is no way of knowing ahead of time.

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