Economist Predicts A ‘Pretty Tough Year’ For 2023, Including Rising Unemployment

Moody’s Analytics Chief Economist Mark Zandi has predicted that Americans will see rising unemployment next year and asserted that overall, 2023 “is going to be a pretty tough year.”

During an appearance on Bloomberg TV’s “Balance of Power” on Wednesday, Zandi argued that 2023 will be a “pretty tough year” because the U.S. will not “see the full effects” of what the Federal Reserve has done until well into the year.

He began by explaining that, not too long ago, corporations were in the midst of a hiring spree — as “unfilled positions were at record highs.”

“You just think about these large businesses, corporations like the Moody’s organization,” Zandi said. “Six, 12 months ago everyone was hiring hand over fist. Unfilled positions were at record highs. You just don’t turn that ship around quickly. And so, I think we are going to see — we have seen some moderation in job growth and we will see some meaningfully more moderation here going forward. And it’s going to take some time. We’re not going to see the full effects of what the Fed’s done for well into next year.”

Zandi then cites inflation — which is 7.7% for the 12 months ended October 2022, according to U.S. Labor Department data published Nov. 10 — and claims that the Federal Reserve is “going to do everything it can” to deal with the problem.

“It does feel like the moment of truth here is dead ahead of us on inflation. The Fed’s going to do everything it can to get inflation and they’re going to succeed one way or the other,” he claimed.

Zandi went on to predict a “tough year,” with slowing job growth and potential declines — though he did project better economic news to come out conveniently just before the 2024 election season.

“So, I think 2023 is going to be a pretty tough year,” he said. “Certainly, we’re going to see job growth slow, may see some declines, unemployment’s going to rise. But by the time folks are running for re-election again, that’s kind of sort of the spring/summer of 2024. Inflation should be down and the economy should be coming back.”