Chief Economist Moody’s: ‘2023 is going to be quite a tough year’ Unemployment will rise and it will take time to see the effects of Fed actions

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During Wednesday’s broadcast of Bloomberg TV’s “Balance of Power,” Moody’s Analytics Chief Economist Mark Zandi predicted that 2023 is “going to be a pretty tough year” because we won’t see “the full effects of what the Fed has done well into” the year and “we’ll see job growth slow down, maybe see some declines, unemployment will rise.”

Zandi stated, “Think about these big companies, companies like the Moody’s organization. Six, 12 months ago everyone took it hand over fist. Unfilled vacancies were at an all-time high. You just don’t turn that ship around anytime soon. And so I think we’ll see — we’ve seen some moderation in job growth and we’ll see some more moderation here going forward. And it’s going to take a while. We won’t see the full effects of what the Fed has done well into next year.”

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He added: “It feels like the moment of truth is dead here for us on inflation. The Fed is going to do everything they can to get inflation and they’re going to succeed one way or another. So I think 2023 is going to be a pretty tough year. Sure, we’ll see job growth slow, maybe see some declines, unemployment will rise. But by the time people run for reelection again, it’s kind of spring/summer 2024. Inflation should come down and the economy should bounce back.”

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Follow Ian Hanchett on Twitter @IanHanchett

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