November 23 2023 | Team nudge
UK Autumn Budget 2023
The UK Budget Autumn Statement is announced, find out what's changed and help your people make informed financial decisions.
3 min read
There’s no sugar coating the economic circumstances we’re facing entering 2023, both globally and in the U.S. How we respond to those challenges – and support our people through them – will matter more than ever in 2023.
Here’s what financial experts are predicting for the U.S. in 2023:
The U.S. will face an economic downturn (of some kind)
Concerns about a possible recession in 2023 seem to be hanging over investors, executives and consumers alike.
Many experts and institutions are now predicting a mild recession, if any, or even a “slowcession” in which growth slows but a full-blown recession is avoided.
A recent Moody’s Analytics report, for example, rang optimistic on the possibility of a recession in 2023, citing profitable businesses, healthy consumer balance sheets and a strong banking system. Still, the Moody’s chief economist Mark Zandi says “the economy is set to have a difficult 2023” and a recession remains a “serious threat.”
Interest rates will continue to rise
As of now, it appears the Federal Reserve has made up its mind to defeat inflation – at nearly any cost. Markets are now predicting a small interest rate rise following the Fed’s February meeting.
Rising rates may have a particular affect on homebuyers, those with fixed-rate mortgages and individuals holding credit card debt. Notably, the average credit card interest rate is reaching historic highs at 21.44% as of January, up from 18.32% in the first quarter of 2022.
As debt becomes more expensive, consumers may struggle to keep up with even minimum payments and could begin feeling the consequences of last year’s high inflation and living costs even more so.
Unemployment may rise slightly
The Federal Reserve raised its 2023 unemployment projections in December for the third consecutive time, from a median projection of 4.4% in September to 4.6%.
However, the job market remains in a historically strong position. Unemployment may rise in 2023, but many experts aren’t predicting a major spike or widespread layoffs as real wages continue to rise.
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