Skip to main content

Economy remains strong despite building headwinds for growth

August 4, 2023

Current Trends

Job growth eased in June to its slowest pace in 30 months, but the labor market remains very tight. Job listings are plentiful (although trending down), and wages are still rising rapidly in many industries. Consequently, consumer spending activity remains solid and core inflation stubbornly elevated, held up by high costs for housing and services. Inflation did slow substantially in June but continues to run too hot for the Fed. Equity markets closed out a strong first half of 2023 despite continued headwinds for corporate earnings and elevated recession risks.

July Current Neutral Scorecard.July Future Negative Scorecard.

Future Outlook

Recession conditions continue to be delayed by the virtuous cycle of strong job and incomes gains driving solid consumer spending. But most leading indicators suggest that activity is slowing broadly, while profit margins are being pressured by high costs and borrowing rates. We still believe that spending cuts by households and businesses in coming months, along with further rate tightening by the Fed, will result in a moderate recession starting in the fourth quarter of 2023. But the odds that a downturn could be pushed into 2024 are rising, even if a soft landing still appears unlikely.

For more economic commentary, subscribe to the Nationwide Market Insights podcast. Find us however you listen below.

Subscribe: Apple | Podcasts | Soundcloud | iHeart |  Spotify |  Amazon  |  Google Podcasts


  • The information in this report is provided by Nationwide Economics and is general in nature and not intended as investment or economic advice, or a recommendation to buy or sell any security or adopt any investment strategy. Additionally, it does not take into account any specific investment objectives, tax and financial condition or particular needs of any specific person.

    The economic and market forecasts reflect our opinion as of the date of this report and are subject to change without notice. These forecasts show a broad range of possible outcomes. Because they are subject to high levels of uncertainty, they will not reflect actual performance. We obtained certain information from sources deemed reliable, but we do not guarantee its accuracy, completeness or fairness. Nationwide, the Nationwide N and Eagle, and Nationwide is on your side are service marks of Nationwide Mutual Insurance Company. © 2023 Nationwide