QC Economy Performing Well as National Economic Growth Slightly Below Average
Key Takeaways
Economic growth in the U.S. slowed to about 1.3% in the first quarter of 2023 compared to 2.6% in the fourth quarter of 2022. The interest rate increases by the Federal Reserve that began over a year ago are finally seeming to have some impact in slowing the economy and bringing down inflation. Even so, the labor market remains quite tight compared to historical standards. Therefore the Fed is probably not done raising interest rates.
The big question for 2023 is whether the U.S. economy will slide into a recession at some point. Many still believe that is possible, but the data continues to show otherwise. We are in an unusual situation where labor markets are tight, inflation is still higher than the Fed would like it to be and growth is starting to dip below trend. There continues to be a tremendous amount of uncertainty in the market as everyone seems to be awaiting every new data point looking for a clue about which direction things are going.
Against that backdrop, the local Quad Cities economy continues to do well--outperforming the national economy in some respects. Job growth continues to be robust and local spending is higher now than on the eve of the pandemic. Still, a national slowdown in the economy would have significant negative effects on local industry. Thus, we continue to track conditions closely, looking for signs pointing in either direction.
