2024 Greater Oklahoma City Outlook

2024 GREATER OKLAHOMA CITY ECONOMIC OUTLOOK A Review of Economic and Fiscal Conditions in the Oklahoma City Metro, Oklahoma and the U.S.

2024 ECONOMIC OUTLOOK

DEMOLITION EXCAVATION HAULING

METHODOLOGY COMMENTS The forecast is an econometric exercise and is not a consensus forecast of business and civic leaders. All models are constructed from publicly available data sources including datasets from the Bureau of Economic Analysis and Bureau of Labor Statistics. The forecasts are entirely determined by the past information contained in the dataset and the econometric specification of the models. No attempt has been made to “adjust” the forecast for the beliefs or anticipation of the modeler. The forecast does not take into account anticipated growth from relocations or “new- to-market” firms. In addition, announced expansions of existing companies may take place over a multi-year timeframe and not be fully recognized in the next year. Announced projects that have not taken place are not reflected in forecasted job numbers. The reader is encouraged to treat the forecast as a baseline from which to make their own adjustments and ultimately reach their own conclusion. TABLE OF CONTENTS Overview................................................... 4

ABOUT THE AUTHORS Russell R. Evans

Partner & Chief Economist Thorberg Collectorate

Russell Evans, Ph.D., partner and chief economist at Thorberg Collectorate, serves as president of the Collectorate’s Regional Economic Advisers division. He is a member of the American Economic Association and the National Association for Business Economics. Eric Long Research Economist Greater Oklahoma City Chamber 405-297-8976 elong@okcchamber.com

Eric Long is the Research Economist for the Greater

Oklahoma City Chamber. For the past 15 years, Eric has provided business intelligence, workforce and economic analysis that supports the region’s economic development efforts and local businesses.

Real Estate Highlights.............................6

Oklahoma City Outlook...........................8

Oklahoma Outlook.................................12

U.S. Economic Outlook..........................14

123 Park Ave., Oklahoma City, OK, 73102 www.okcchamber.com • 405.297.8900

OVERVIEW WHERE DID WE GROW IN 2023?

In 2023, the Oklahoma City metro economy experienced year-over-year nonfarm job growth of 2.4% or a gain of 17,000 jobs. The largest percentage year-over-year job gains were found in education & health (+6.0%), leisure & hospitality (4.8%), construction (3.2%), manufacturing (2.7%), government (2.0%), and mining/oil & gas (2.0%). The only super-sector industry experiencing decline was information (-0.3%). The Oklahoma City metro completed 2023 with an annual average unemployment rate for the entire year of 2.9%, the fourth lowest experienced by OKC since 1990. Rates ranged as high as 3.2 % (Oct.) and as low as 2.1 % (Apr.). Oklahoma City finished out the year ranked among the top 20 lowest unemployment rates for large metros (over 1 million population). The total labor force, driven by population gains, was the largest in history (over 752,000 in November 2023). WHERE WILL WE GROW IN 2024? Positive Oklahoma City metro nonfarm job growth is expected in 2024, with the baseline job forecast scenario growing by 2% or adding nearly 14,000 jobs. Two alternative forecast models that the Greater Oklahoma City Chamber tracks separately show a more modest 2024 employment growth between 0.3% and 0.7%. The local economy remains vulnerable to national and global uncertainties that may disrupt economic conditions. The largest percentage year-over-year job gains are expected in other services (4.2%), education & healthcare (3.8%), trade & transportation (2.6%), mining (2.5%), government (2.1%), construction (1.7%), manufacturing (1.7%), and professional & business services (1.2%). Job posting data can often be viewed as a proxy for future intent of hiring intentions. The total number of job postings for December 2023 in the OKC metro was down by 19% when compared to the same month prior year (December 2022). But that is considerably better than the 31% decline for the nation. SELECT 2023 ANNOUNCEMENTS FROM CHAMBER-ASSISTED COMPANIES In 2023, 130 Chamber-assisted companies announced plans for the creation of 4,365 jobs with an annual average salary of $67,355. In addition, those same companies announced more than $6.77 billion in capital investment and $294 million in payroll. Over the past three years, 14,593 jobs have been created with $774 million in payroll and $7.92 billion in capital investment. • Professional’s Choice - Equine product manufacturing adding 30 jobs in Oklahoma City; $150K Capex • Canoo - Electric vehicle manufacturer annouced 550 jobs in Oklahoma City; $347M Capex • Centrillium Proteins - Meat processing facility adding 100 jobs in Midwest City; $70M Capex • Sam’s Club - The state’s first Sam’s Club Distribution Center announced 130 jobs in Oklahoma City; $45M Capex • U.S. AutoForce - Auto parts distribution center adding 40 jobs in Oklahoma City; $14.5M Capex • Merhow - Horse trailer manufacturer from Michigan opening up a new facility in Oklahoma City, adding 50 jobs. • Southern Rock Energy Partners - Large-scale crude refinery announced 420 jobs planned for Cushing; $5.6B Capex

2024 ECONOMIC OUTLOOK

OVERVIEW WHAT TYPES OF COMPANIES ARE LOOKING AT THE GREATER OKLAHOMA CITY REGION?

Photo Courtesy of ClimateMaster

In January 2024, the Greater Oklahoma City Partnership reported 83 companies currently considering relocating or expanding in the region. Of those companies, more than 60% are in manufacturing. This reinforces what we are seeing nationally where companies are reshoring operations to improve supply chain logistics and moving to lower cost markets.

Aerospace and distribution projects also have strong interest in OKC. There are fewer office projects in the pipeline as companies continue to struggle to understand how remote/hybrid work will factor into space needs in the short to long-term future.

2024 ECONOMIC OUTLOOK

REAL ESTATE HIGHLIGHTS

OKLAHOMA CITY RETAIL MARKET OVERVIEW For the seven-county Oklahoma City metropolitan area, the 2023 calendar year total taxable retail sales increased by 2.7% over the prior year. Year- over-year increases in both 2021 (+13.6%) and 2022 (+11.6%) were the largest increases seen in at least 30 years. At approximately $29.4 billion, the Oklahoma City metro accounts for 44% of the taxable retail sales for the entire state of Oklahoma and 36% of the state’s population. This continues to make the Oklahoma City metro a driving force for retail trade in the state. Per the Price Edwards 2023 OKC Year End Retail Market Summary, retail vacancy in the Oklahoma City market ended the year at 8.9%, up slightly from 8.5% the prior year. Total retail square footage has grown to over 50 million square feet.

OKLAHOMA CITY INDUSTRIAL MARKET OVERVIEW The CoStar Industrial Market Report (January 2024) reports that the Oklahoma City market has an inventory of 148 million SF of industrial space. Rent grew by 4.1% over the prior year, just slightly above historical averages (3.5%). The vacancy rate in early 2024 was 5% and is expected to rise modestly in 2024. There is currently 4.1 million SF of industrial construction underway in Oklahoma City. Around 85% of that space underway is in the Southwest Submarket (3.6 million SF). With 88% of the total construction preleased, CoStar is not anticipating these projects to have an impact on market fundamentals. OKLAHOMA CITY OFFICE MARKET OVERVIEW Oklahoma City’s office market experienced rent growth of 1.6% over the past year and outpaced the nation (under 1%). The Oklahoma City vacancy rate of 10% is also outperforming the nation (slightly under 14%). According to CoStar, there is currently about 70 million SF of office space in the Oklahoma City market. As of early 2024, just under 700,000 SF of office product is currently under construction. Asking rates average $19.54 per square feet across all property types ($16.70- $22.88)

2024 ECONOMIC OUTLOOK

REAL ESTATE HIGHLIGHTS

RESIDENTIAL HOUSING MARKET According to Dharma LLC, the Oklahoma City metro recorded 4,465 housing starts in 2023 (the lowest since 2016). This was 14% below the prior year. The higher interest rate environment has resulted in lower housing starts for the OKC metro for each of the past two years and notably below pre-pandemic totals (5,366 in 2019). Over the past five years (2019-2023), more than 27,600 housing starts were captured in the Oklahoma City metro (an annual average of 5,520). This exceeds the number of housing starts in the previous five-year period (24,602 from 2014-2018).

the number of homes available for sale was up 26%. There were 5,670 active listings at the end of 2023. There were 29,601 new listings in 2023, a decrease of 5.1%.

VALUE OF CONSTRUCTION PROJECTS According to Dodge, in 2023 the total construction value of tracked contract projects (residential, non-residential, and non-building infrastructure) in the Oklahoma City MSA was $4.4 billion. That was 18% below the prior year (2022). The largest positive year-over-year percentage gains were found in the warehouses, manufacturing, miscellaneous nonresidential buildings, and dormitories categories. The largest year-over-year declines in the construction value of contracts were in hotels & motels, retail stores & restaurants, parking garages, and amusement categories. For 2024, the total construction value of contract projects in the Oklahoma City MSA is forecasted by Dodge to increase by 12%. Flat values in non- residential and a 10% increase in residential construction value contracts are expected. A 37% increase is expected in non-building infrastructure project values which include bridges, water supply systems and other.

Similar to the nation, as borrowing costs in 2023 reached a two-decade high, Oklahoma City area home sales and home prices began to slow. More than 22,800 closed sales and 23,300 pending sales were reported. The MLSOK Annual Report showed that 2023 home prices in the Oklahoma City metro were up compared to last year. The overall median sales price increased 3.3% to $249,000 for the year. Single-family home prices were up 2.0% compared to last year, and townhouse-condo home prices were up 5.2%. Comparing 2023 to the prior year,

2024 ECONOMIC OUTLOOK

OKLAHOMA CITY OUTLOOK – URBANIZATION DRIVES GROWTH IN 2024 Oklahoma City benefits from the forces of economic geography driving urbanization in the south and west. Oklahoma City further benefits from its proximity to Dallas along the fast-growing I-35 mega region. The challenge for Oklahoma City will not be access to opportunities for economic growth. Instead, the challenge will be to recognize the fragile nature of past success and the constant need to invest in its urban amenity complex to remain an attractive destination for mobile households and firms. Nominal measures, like personal income, will post strong growth in 2024, but the growth will be a little deceptive due to lingering inflation. Strong gains will reflect a combination of forces including sustained inflation pressures, in-migration, and new economic activity. 2024 OKLAHOMA CITY OUTLOOK KEY TAKEAWAYS FOR 2024 • Oklahoma City MSA or metro job growth will OKLAHOMA CITY MSA JOB GROWTH 2024-2025

Oklahoma City metro payroll employment grows solidly in 2024 at 2%

close 2023 at a robust 2.4%; the pace of job gains is expected to slow in 2024 to 2%. • Self-employment (proprietor’s employment) is rising in the Oklahoma City metro as the economy becomes more entrepreneurial. • Oklahoma City MSA population growth picked up steam at the turn of the decade and will remain strong at 1.2% growth in 2024. • Per capita income in the metro will grow at 4.7% in 2024 to more than $66,000.

760

6.0%

Percent Change Nonfarm Employment

5.0%

720

4.0%

680

3.0%

2.0%

640

1.0%

600

0.0%

Source: Bureau of Labor Statistics, author calculations

INDICATORS (Y/Y PERCENT CHANGE)

2019 2020 2021 2022

2023 (E) 2024 (F) 2025 (F)

886,099 871,085 898,822 943,288 0.3% -1.7% 3.2% 4.9%

TOTAL EMPLOYMENT

972,422 998,383 1,019,279

% CHANGE

3.1% 686

2.7%

2.1%

661

632

645

669

NONFARM EMP (THOUS)

700

711

1.8% -4.4% 2.1% 3.7%

% CHANGE

2.4% 2.0%

1.6% 579

531

504

518

543

PRIVATE EMP (THOUS)

557

568

1.9% -5.1% 2.9% 4.7% 674,481 644,965 659,661 687,773 1.7% -4.4% 2.3% 4.3% 52,693 53,147 57,132 62,204 8.6% 0.9% 7.5% 8.9% 1,413,004 1,429,854 1,443,587 1,459,380 1.1% 1.2% 1.0% 1.1%

% CHANGE

2.6% 2.0% 2.0%

WAGE AND SALARY EMPLOYMENT

696,862 711,881 1.3% 2.2%

721,536

% CHANGE

1.4%

EARNINGS ($ THOUS)

65,880 68,930 71,113 5.9% 4.6% 3.2% 1,476,773 1,494,149 1,512,189

% CHANGE

POPULATION

% CHANGE

1.2%

72,114 76,701

85,256 88,565

PERSONAL INCOME ($ MIL)

93,586 99,092 104,116

8.1% 6.4% 11.2% 3.9% 51,036 53,642 59,059 60,687 6.9% 5.1% 10.1% 2.8%

% CHANGE

5.7% 5.9%

5.1%

PER CAPITA PERSONAL INCOME ($)

63,372 66,320 68,851 4.4% 4.7% 3.8%

% CHANGE

2024 ECONOMIC OUTLOOK

OKC MSA Age Distribution

OKLAHOMA CITY MSA LABOR POOL AND INDUSTRY SECTOR COMPOSITION • Even as Oklahoma City’s population grows, it remains younger on average than the U.S. population. The OKC metro median age (37.1) is two full years younger than the nation (39.1). • 39% of the metro population is in the prime working age category of 25-54. • A high concentration of young people in the metro should provide labor pool support for years to come. Quality of life improvements and job opportunities will be critical to keep these young people in the market as they age. • Job gains in 2024 are expected to be led by health services and the trade sector (retail, wholesale, transportation, and utilities). • Job gains in health and trade are expected to represent more than half or 1.08% of the expected 2% gains in 2024 private payrolls. • Leisure and hospitality employment is expected to be flat as consumer spending weakens, but if the consumer can prove resilient once more, this sector could drive job growth above the projection. • Currently, the Oklahoma City metro has the highest concentration of its jobs in the labor- intensive health services, leisure services, and retail trade industries. • Manufacturing remains an important piece of the composition of employment with scientific and technical services and financial services emerging as important employment bases. • The small direct employment contribution of mining (oil and natural gas) contradicts its true importance as many oil and gas supply chain jobs are scattered within other industries.

OKCMSA Percent US Percent

Age Range

Source: United States Census Bureau

-0.30% -0.10% 0.10% 0.30% 0.50% 0.70% LEIS INFO MIN FIN CONST MFG PBS OTHER GOV TRADE EDHLTH -0.07% 0.00% 0.04% 0.06% 0.08% 0.09% 0.15% 0.18% 0.40% 0.48% 2024 Nonfarm Payroll Growth: 2.0% Health services, trade, and the public sector should contribute the most to OKC metro job growth in 2024 0.60% -1,500 -500 500 1,500 2,500 3,500 4,500 LEIS INFO MIN FIN CONST MFG PBS OTHER GOV TRADE EDHLTH -467 -17 266 408 582 610 1,058 1,208 2,742 3,317 4,127 2024 Nonfarm Payroll Growth: 13,835 Jobs The Oklahoma City MSA is expected to add nearly 14,000 jobs in 2024 Source: Bureau of Labor Statistics, author calculations

Source: Bureau of Labor Statistics, author calculations

2024 ECONOMIC OUTLOOK

2024 OKLAHOMA CITY OUTLOOK

• Oklahoma City job growth has outpaced national job growth since 2010 with the MSA averaging 1.5% job growth per year.

• The pace of nonfarm earnings growth in the Oklahoma City MSA has been much stronger than the U.S. average with OKC MSA earnings averaging 4.6% per year against U.S. average growth of 3.9%.

• Over the long run, the Oklahoma City metro economy will continue to outperform the U.S. average as it emerges as a major U.S. metro area.

CONST

UTI

ADMIN

FIN

MIN

WHO

OTH

RET

INFO

MFG

MGMT

LEIS

TECH

HLTH

Source: Bureau of Labor Statistics, author calculations

Major indicators point to a slowing U.S. economy in 2024. The posture of both markets and policymakers is hopeful that as economic activity slows, interest rates can fall. This golden path would allow financial conditions to loosen in the very moment that the economy is on the edge of contraction, allowing inflation to trace a path to policy’s 2% target without the economy experiencing a recession. The soft- landing scenario is certainly one possible outcome for the coming year and is the base case presented in this outlook. But much can change over the course of a year. It is unlikely that we will enjoy a surprise that impacts economic conditions in a positive way. Unfortunately, it is more likely for something to happen that is detrimental to the economy. A policy mistake, something that causes households to take on even more debt, global conflicts, and supply-side inflationary pressures, all pose risks to the forecast. It is appropriate to plan now for the possibility of a more challenging economic environment than in our baseline forecast. In the meantime, forces of economic geography will continue to respond to falling costs and move people and economic activity south and west. Economic flows will be attracted to dense, urban, amenity-rich areas where both producers and consumers can benefit from locating next to one another. These flows and the pattern of urbanization that follows will create opportunities for the state’s metro areas while challenging rural economies.

2024 ECONOMIC OUTLOOK

Job growth in the OKC MSA has outpaced job growth nationally

100 105 110 115 120 125 130

121.92

Average Yearly Job Growth OKC MSA 1.5% U.S. 1.4%

120.64

90 95

OKC MSA U.S.

Source: Bureau of Labor Statistics, author calculations

Oklahoma City MSA earnings are growing faster than U.S. Average

300

257.15

Average Yearly Growth OKC MSA 4.6% U.S. 3.9%

250

200

224.40

150

100

OKC MSA U.S.

2001

2010

2013

2016

2019

2004

2007

2022

Source: Bureau of Labor Statistics, author calculations

2024 ECONOMIC OUTLOOK

OKLAHOMA OUTLOOK – WHAT CAN WE EXPECT? The most basic measure of a state’s economy is the value of the goods and services companies in the state produce and sell. By this measure, the Oklahoma economy produced and sold just over $200 billion of goods and services in 2019. Production fell during the pandemic and despite the strong economic headlines, only regained that level of production in 2023. Many Oklahoma households felt economic strength disproportionate to the economic reality as policies supplemented incomes and drove up home prices, emboldening Oklahoma consumers. At the same time, employers scrambled to recover workers - creating a surplus of job opportunities. As some of the influence of policy excesses recede, the growth of 2023 will provide helpful momentum heading into 2024. 2024 OKLAHOMA OUTLOOK KEY TAKEAWAYS FOR 2024 • Job growth will slow in 2024 with the economic strength concentrated in the Oklahoma City and Tulsa metro areas. OKLAHOMA PRODUCTION RECOVERY IN 2023 $203 20% $210 YoY Growth OK Real GDP Oklahoma Real GDP

$201

$200

15%

$195

• Oklahoma economic activity will start the year strong which will offset much of any weakness that materializes later in the year. • Growth will be concentrated in urban counties with many rural counties losing population.

5.9%

$190

10%

5.8%

4.8%

$180

$182

0.5%

$170

$160

-5%

$150

-10%

Source: Bureau of Economic Analysis, author calculations

INDICATORS (Y/Y PERCENT CHANGE) NONFARM EMPLOYMENT (THOUS)

2019 2020 2021 2022

2023(E) 2024(F) 2025(F)

1,705 1,628

1,650 1,698

1,730 1.9% 1,374 1.9%

1,744

1,759

0.9% -4.5% 1.4% 2.9%

PERCENT CHANGE (%)

0.8% 0.9%

1,352

1,281

1,304

1,349

PRIVATE EMPLOYMENT (THOUS)

1,386 0.9%

1,401

0.8% -5.2% 1.8% 3.4% 1,840,223 1,841,349 1,860,337 1,887,040 0.5% 0.1% 1.0% 1.4%

PERCENT CHANGE (%)

1.1%

LABOR FORCE

1,943,868 2,020,845 2,095,690 3.0% 4.0% 3.7% 126,152 131,949 137,920 7.3% 4.6% 4.5%

PERCENT CHANGE (%)

105,828 104,840 109,571

117,555

EMPLOYEE COMPENSATION ($MIL)

3.8% -0.9% 4.5% 7.3% 189,981 199,233 220,176 226,308 5.1% 4.9% 10.5% 2.8% 3,945,083 3,965,953 3,991,222 4,020,900 0.4% 0.5% 0.6% 0.7% 48,156 50,236 55,167 56,281 4.7% 4.3% 9.8% 2.0% 205,263 191,654 217,731 242,739 0.5% -6.6% 13.6% 11.5%

PERCENT CHANGE (%)

PERSONAL INCOME ($ MIL)

236,851

249,215 260,698

PERCENT CHANGE (%)

4.7% 5.2% 4.6% 4,056,189 4,092,322 4,130,503 0.9% 0.9% 0.9% 58,392 60,899 63,115 3.8% 4.3% 3.6% 254,177 269,172 283,920 4.7% 5.9% 5.5%

POPULATION

PERCENT CHANGE (%)

PER CAPITA PERSONAL INCOME ($)

PERCENT CHANGE (%) NOM. GDP ($ MIL) PERCENT CHANGE (%)

2024 ECONOMIC OUTLOOK

Metro areas in the state account for an increasing share of population and income

METRO SHARE (POP)

METRO SHARE (INC)

STATE

74%

U.S. TX CO LA TN MO KS OK AR NM NE

86% 90% 88% 85% 78% 76% 70% 68% 65% 67% 66%

89% 92% 89% 87% 84% 81% 75% 73% 71% 69% 68%

Metro Personal Income Share Metro Population Share

72.6%

72%

69.6%

69.2%

70%

67.8%

68%

66%

64.7%

63.0%

64%

62%

STATE POPULATION GROWTH AND URBAN TRANSFORMATION • Oklahoma is playing catchup relative to other states in terms of urbanization. • Long-run patterns of urbanization across the U.S. will continue to concentrate population and income in metro areas. • Metro areas accounted for 68% of state population and 73% of state personal income in 2022 with those trends expected to carry through this decade. • The state’s population will grow at about 1%, but with stronger urban gains offsetting some rural population losses. • Transfer receipts include social security, Medicare, Medicaid, SNAP, and other government income supplements such as pandemic stimulus payments. In Oklahoma, people living in metro areas tend to be less reliant on government supplements than those in rural areas. • Urbanization and location along the I-35 corridor position Oklahoma City favorably for long-run prosperity. • The state population approaches 4.15 million by the end of 2025.

Source: Bureau of Economic Analysis, author calculations

Metro areas are less reliant on government payments to support resident incomes

35%

Transfer Share of Income, Metro Transfer Share of Income, Nonmetro

30%

29.3%

25.9%

25%

20.5%

20%

17.2%

18.6%

13.1%

15%

10%

Source: Bureau of Economic Analysis, author calculations

Oklahoma population growth nears 1% through 2025

4.20

1.5%

Percent Change Population

4.15

1.3%

4.11

4.10

4.07

1.1%

0.9%

4.05

0.9%

4.00

0.7%

3.95

3.90

0.5%

Source: Bureau of Economic Analysis, author calculations

2024 ECONOMIC OUTLOOK 13

U.S. ECONOMY– SLOWER GROWTH IN 2024 AS RECESSION ODDS FALL Consumers, businesses, and policymakers are increasingly optimistic that the economy will again avoid a recession in 2024. Inflation is trending towards 2%, allowing policymakers to perhaps ease interest rates in the second half of the year. That doesn’t mean economic success will be easy in 2024. We expect consumer behavior to adjust to the new reality of higher interest rates, tighter financial conditions and stretched access to credit. We anticipate a drag from world conflicts and disrupted global supply chains. In short, while the probability is increasing that 2024 will bring slower growth and easing inflation pressures, it is too soon to celebrate 2024 as a year without disruption. 2024 U.S. ECONOMIC OUTLOOK KEY TAKEAWAYS FOR 2024

DRIVERS OF ECONOMIC GROWTH IN 2023 U.S. real GDP growth in 2023 was driven by consumer purchases and business investments

• For job seekers, the job market will be a little harder to navigate with fewer job openings; the unemployment rate is expected to rise to 4.5% by the end of the year. • Consumers feel more optimistic about the future but are constrained now by higher interest-rate debt; consumer spending slows in 2024 leading to slower U.S. economic growth. • Falling housing prices and rents will lead inflation lower and allow the Federal Reserve to begin to cut interest rates in the second half of the year. • The risks to the economic outlook are still tilted to the downside, but those risks are better understood and seem contained to, at worst, a short and shallow recession.

4.9%

2.6%

2.5%

2.3%

2.1%

1.7%

0.9%

0.8%

0.6%

-1%

Consumption Investment Real GDP

-1.7%

-2%

-3%

22 QIV

23 QI

23 QII

23 QIII

Source: Bureau of Economic Analysis

2022 QIII

2022 QIV

2023 QI

2023 QII

2023 QIII

INDICATORS (Y/Y PERCENT CHANGE)

2023 QIV(E)

2024 QI(F)

2024 QII(F)

2024 QIII(F)

2024 QIV(F)

2.66% 2.57% 2.24% 2.06% 4.9%

U.S. REAL GDP

1.10% 0.70% 0.65% 1.10% 1.48%

3.53% 3.57% 3.50% 3.57% 3.7%

U.S. UNEMPLOYMENT RATE

3.73% 4.00% 4.20% 4.26% 4.27%

2.56% 4.10% 4.65% 5.08% 5.3%

U.S. FED FUNDS RATE

5.33% 5.38% 5.25% 5.13% 4.75%

5.21% 5.09% 4.84% 4.58% 3.8%

U.S. CORE PCE INFLATION

2.90% 2.70% 2.50% 2.30% 2.20%

2024 ECONOMIC OUTLOOK

2024 FORECAST OF INDICATORS

U.S. economic growth will slow in 2024 to under 2%

The headline unemployment rate will rise as job searches take longer

6.0%

4.4%

4.3%

4.9%

4.2%

4.3%

2.7% 2.6% 2.2%

1.5% 1.7%

3.0%

4.2%

4.0%

2.1%

3.8%

1.5%

0.0%

-0.6%

3.7%

3.6%

-2.0%

-3.0%

3.4%

Source: Bureau of Economic Analysis

Source: Bureau of Labor Statistics

5.5% Federal Reserve holds policy in place until middle of year when modest rate cuts begin

A slowing economy and falling housing prices will help move inflation towards policy's 2% target

5.4%

5.3%

6.0%

5.4%

5.2%

5.0%

5.5%

4.9%

4.0%

3.4%

3.5%

3.8%

4.7%

4.6%

2.3%

3.0%

2.2%

2.9%

4.4%

4.3%

2.0%

1.0%

4.0%

Source: Federal Reserve Economic Data

Source: Bureau of Economic Analysis

Conference Board

Historical

Bloomberg

NABE

2023 LABOR MARKET IN REVIEW The pace of new job creation slowed to 200,000 new jobs per month in 2023

Excess job listings fell throughout the year making it a little harder to find a job in 2024 making it a little harder to find a job in 2023

6.0%

13,000

-150 -50 50 150 250 350 450

Openings per Unemployed Person Job Openings

Unemployment Rate NF Job Creation

5.5%

472

11,000

5.0%

216

8,790

4.5%

9,000

105

4.0%

1.4

3.7%

7,000

3.4%

3.5%

5,000

3.0%

Source: Bureau of Labor Statistics

2024 ECONOMIC OUTLOOK 15

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