Year Ends on a High Note for QC Economy, but Uncertainty Lies Ahead

Key Takeaways

The U.S. economy grew at about a three percent rate in 2022 in spite of several increases in short-term interest rates during the year by the Federal Reserve. Inflation, which began to become noticeable in 2021, reached the highest level in decades during 2022 before finally showing signs of easing as the year came to a close. Job growth nationally and locally remained quite strong, reflecting the solid recovery following the COVID-19 recession.

Even so, there is now uncertainty on the horizon as we begin 2023. Growth forecasts for the year ahead are generally still positive, but lower than last year. These growth forecasts hinge on how much the Federal Reserve will need to further raise interest rates in 2023 and whether those rate hikes will slow the economy too much. While many signs are pointing to recession ahead, some economists still acknowledge that a negative outcome could still be avoided. The labor market remains tight, particularly in certain high demand areas. However, the labor market is often a lagging indicator, meaning that we may not see declines in employment until a recession is already underway.

Locally, economic conditions tracked well with the national economy with job growth continuing, though slowing slightly in the fourth quarter. Inflation was slightly lower in the midwestern region of the country, due in part to lower costs for energy and housing compared to the rest of the country.


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Julie Forsythe
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Julie Forsythe
Senior Vice President, Business & Economic Growth
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