Savannah Chamber

9 3 Household wealth could decline, but it would take a major collapse in home prices and/or a major stock market reversal to produce a dramatic decline in consumers' overall spending. We do not expect especially sharp corrections in the prices of equites or homes, but should this happen, spending would contract, and a recession would begin. Spending for services will increase faster than spending for goods. In addition, pent-up demand for services not purchased during the pandemic did not accumulate to the same degree that it did for durable goods such as cars. Among services, providers of healthcare and education will see above-average growth in spending. Sales of both durable and nondurable goods are expected to increase, with spending for nondurables increasing faster than spending for durable goods. One exception will be vehicles: we expect 16.6 million cars will be sold in 2024 because pent-up demand is substantial. There are some additional factors that bode well for future vehicle sales. In post-pandemic America, people are less inclined to use public transportation. In addition, stronger preferences for homes in the suburbs—or rural areas—mean more need for new vehicles, especially light trucks. Price increases and demographic factors will prompt more spending on pharmaceuticals and other medical products. Spending on groceries will rise modestly because restaurants will continue to usurp market share from grocers. Spending on clothing and footwear will decrease slightly. Little or no home price appreciation will hurt sales of durable household equipment, building materials, fixtures, floor coverings, furniture as well as many other home-related goods and services. Spending on luxury goods should slow down, too. Labor Markets Total nonfarm employment will increase by 0.3 percent compared to 2 percent in 2023 and 4.3 percent in 2022. Most job growth will be the least interest-sensitive sectors, such healthcare, education, and state and local government. Some industries—such as hospitality—that suffered very large job losses during the pandemic recession will continue to add jobs slowly. In contrast, some jobs will be lost in the most interest- sensitive sectors, including nonresidential construction, apartment construction, financial activities, mining and logging, and information. Transportation and manufacturing, typically cyclical industries, are not expected to lose jobs, but retailing will see modest job losses. In 2024, the diminished availability of jobs means the quit rate will drop sharply as workers feel less confident about finding better opportunities. This will limit wage and salary gains because job switchers tend to see higher than average increases in pay. The lower quit rate therefore should reduce inflationary pressures. Industrial production and the number of manufacturing jobs will increase modestly. Capacity utilization will be 78 percent, about the same as last year. Supply chain disruptions will dissipate, but trade tensions and past appreciation of the U.S. dollar will be headwinds. Reshoring production will be a positive factor for manufacturing job growth, however. One factor to consider is that many of the new post-pandemic jobs are not in the places where workers currently live, and it will take several years before the situation is

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