Economic Outlook: ‘Some Momentum’ Going into 2024–#MBAServicing24

(Joel Kan)

ORLANDO–The U.S. economy was stronger in 2023 than most analysts expected, according to Joel Kan, Vice President and Deputy Chief Economist with the Mortgage Bankers Association.

Looking at the macroeconomic environment, “Really, the point is that we all saw a much stronger 2023 globally,” Kan said here at MBA’s Servicing Solutions Conference & Expo 2024. “I think even some of the global experts were saying that it’s not sustainable; that we are going to see somewhat of a slowdown coming into 2024. But the U.S. economy had stronger than expected growth in 2023, specifically in Q4, with a 3.3% growth rate, and that’s going to give us some momentum going into 2024.”

Kan noted MBA’s previous forecast expected a mild recession in the first half of the year, “But I think now we’re at a point where with that momentum and resiliency that we’re seeing, we are going to see less of a drop off,” he said. “Perhaps a little slower growth than what we have seen in the last few years, but not any kind of drop off or contraction.”

Looking ahead, Kan said MBA expects a gradual slowdown for 2024, going into 2025 and 2026 as the economy gets closer to the 2% average typically seen.

Turning to employment, Kan noted the resiliency of the job market. “We had all been expecting, as economic activity cools off and there is less spending, that hiring would start to slow more drastically. But that hasn’t really happened.”

Kan said the annual average for 2023 was about 255,000 jobs added to the economy per month, down from 2021 and 2022, but 2024 started out strong, with 353,000 jobs added in January.  

“Some might argue there’s a bit of noise in that [January figure], and maybe a little bit of seasonal impact,” Kan said. “But if you look at the numbers, January was really a broad-based month in terms of the jobs added across the economy. So, one data point is not a trend, but certainly something that was not expected. We’re going to be watching that.”