U.S. Economic Outlook, September 2023

The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates and inflation.

As the seasons change, signs are emerging of a cooling economy: job creation and gross domestic product (GDP) growth are returning to more familiar levels. Inflation’s gradual descent continues, a pattern we will soon see in the leaves of deciduous trees.

It is taking time for the new normal to feel like, well, normal. Lower inflation only means price increases leveling off, not a return to the prices of old. Wage gains are welcome when they are announced, but are forgotten as costs of living rise. The resumption of student loan payments will be tolerable for most borrowers, but they are yet another challenge for households to address.

Amid so many transitions, the labor market has stood firm. Strong employment conditions continue to serve as the foundation for our expectation of continued growth. As long as we are working, spending will continue, supported by tamer inflation. The economy may not yet feel normal, but that does not mean a recession is imminent.

Key Economic Indicators