By Stephen Nakrosis


S&P Global Ratings on Tuesday said the U.S. economy, spurred by a steady labor market, appeared on track for 2.5% average growth in 2024.

However, S&P said, the forecast gives an overly positive outlook. "A strong handoff from last year--with 3.1% annual growth in fourth-quarter 2023--masks the forecasted gradual slowdown to 1.8% by fourth-quarter 2024," according to S&P.

The chance of a recession in the next 12 months seems less likely now than in spring of 2023, S&P said. But factors that supported rising demand last year, such as consumer spending and direct government outlays, are expected to fade over time, the agency added. The economy is expected to transition to slightly below-potential growth over the next couple of years, S&P said.

Inflation is likely remain above the Fed's 2% target this year, S&P said, adding it has penciled 75 basis points of rate cuts in 2024.


Write to Stephen Nakrosis at stephen.nakrosis@wsj.com


(END) Dow Jones Newswires

03-26-24 1428ET