A resilient U.S. economy is likely to dodge a recession if the Federal Reserve is done raising interest rates, but growth is bound to slow in the next year because of higher borrowing costs.
As recently as last spring, most economists believed a recession was inevitable. Only once or twice in its history has the Fed pulled off a soft landing. Just eight months ago, the same group of economists predicted growth would flatline in 2023 and put the U.S. perilously close to recession.The ABA-affiliated economists pointed to the still-strong labor market and the first increase in a few years in inflation-adjusted incomes. These trends are likely to keep consumer spending — the main engine of the economy — revving just enough to keep the U.S. growing.