JP Morgan US economic outlook for next year, in breif
There are now upside risks to growth from deregulation and tax cutting and downside risks from tariffs and general policy uncertaintyBut one shouldn’t lose sight of the business cycle, which has been performing wellWe look for only a mild downshift in growth in 2025 to 2%, with a small additional rise in the unemployment rate to 4.5%Core PCE inflation expected to decelerate a half-point next year to 2.3%We look for the Fed to cut 25bps in December and another 75bps by the end of 3Q25, then stop at 3.75% Labor supply is set to slow over the next couple years, with breakeven payroll growth falling under 100k by 2026labor demand also keeps moderating, though not enough to create a recessionGrowth with be supported by solid but not speculator business productivity gains of of 1.5-2.0% per yearWe assume that tariffs on China will rise sharply but not be raised significantly elsewhere, leading to slower trade volumes and higher import prices
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This article was written by Eamonn Sheridan at www.forexlive.com.
