2023 In Review
- Gross Domestic Product (GDP): Surprisingly strong, led by third quarter blowout of 4.9% growth.
- Inflation: Headline inflation fell sharply from a peak of 9% in June 2022 to 3.1% in November.
- Unemployment: Job creation was strong, and 3.7% unemployment remains near its record low. Increases in the participation rate helped.
- Interest Rates:
- Short-term: The Federal Reserve (Fed) is still at peak rates of 5.25-5.50% on federal funds.
- Long-term: Rose consistently through the year to 5%, then reversed sharply to as low as 3.9%.
- Recession/Soft Landing?: Neither occurred in 2023, but conditions at the year-end were trending toward a soft landing.
- Bonds and stocks provided positive returns. Significant dispersion within the stock indices was a worrying development.