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Why it matters: The economy could slow in the first half of 2024 because consumer spending is likely to slow. Meanwhile, job openings are going to remain far above the number of unemployed workers. The economy is poised to grow once inflation falls further and Americans absorb the effects of higher interest rates.

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Be smart:

• Consumer spending: Consumers’ pandemic-era savings are largely gone, and credit card balances have risen sharply. This will weaken spending and growth. However the worker shortage will put a floor under how much the economy slows because wages have been growing and are likely to continue.
• Inflation and interest rates: While inflation is coming down, it remains above the Federal Reserve’s 2% target. This will remain a burden on consumers’ budgets and reduce the chances the Fed can lower interest rates soon.

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Bottom line: Leaders in government should be aware of the challenges businesses, families, and communities will face in 2024. Pro-growth policiesshould be top of mind for keeping the U.S. economy strong and Americans thriving.