DEFLATING DATA
05/09/2024 |
The Fed is calling for real GDP growth of 2.1% in 2024 and 2% in 2025. Simultaneously, the nonpartisan Congressional Budget Office estimates that potential GDP, that is the increase in the labor force plus the impact of rising productivity, will be 3.5% in both 2024 and 2025. This means there will be growing excess capacity which is deflationary and should result in higher unemployment and further slowing in inflation.