National Economy Snapshot

The National Economy

The economy entered 2024 on a solid footing, posting 3.4% GDP growth in Q4 2023, and 2.5% growth for 2023 overall. The U.S. economy dodged predictions of a recession, largely due to resilient consumer spending, and instead significantly outperformed its peers in the developed world.

Most economists no longer forecast a recession in 2024, and instead expect growth to slow, resulting in growth between 0.7% and 1.5% for the year. The annual inflation rate for the U.S. was 3.2% for the 12 months ending February. Inflation is expected to continue to slowly decline in 2024. Forecasts are that inflation may reach the Fed’s desired target of 2.0% late in 2024.

In an effort to combat persistent inflation, the Federal Reserve aggressively raised interest rates in 2023. Market expectations are that interest rates have peaked, and that the Fed will begin to reduce rates at some point in Q3 2024.

While energy costs may continue to fall, labor costs are likely to continue to increase for employers. With ongoing positive job growth and unemployment consistently below 4%, upward pressure on wages will continue. Minimum wage increased in 2024 as well in many Northeast states.

All told, we are expecting a year of modest-yet-positive earnings for most agricultural businesses in the Northeast, with performance varying significantly by industry sector and individual circumstances.