Curtis Dubay
Chief Economist, U.S Chamber of Commerce


May 26, 2023


What’s With the Resilient Housing Market?

May 26, 2023

Housing market Stabilizing

Despite the enormous headwinds from sharply higher mortgage interest rates, the housing market is proving to be resilient after demand fell off steeply when interest rates initially rose.

Why it matters: Demand for homes still exceeds supply, and prices are likely to remain steady as long as this situation continues.


  • Home builders’ optimism is up in recent months.
  • Housing starts are rebounding. New permits are down the last two months, but that’s after a 10% jump in February.
  • New Home sales were up 4% in the last two months. Existing home sales are down the last two months, but that was after a 14% gain in February. Pending sales were flat in April.

Be smart: Even with higher mortgage rates, there are still more buyers than sellers.

  • Buyers are coming back into the market because prices have come down as interest rates have risen.
  • Supply is constrained because existing homeowners are hesitant to put their homes on the market, giving up a low-rate mortgage for one with a higher rate.

Looking ahead: While prices will stay below pandemic highs, expect them to remain steady as long as demand outpaces supply.

Business Economists Forecast Modest Growth Through 2024

May 24, 2023

Business economists are lukewarm on the economy. The National Association of Business Economists (NABE) regularly releases a survey of prominent economists where it asks them about their outlooks for the economy. The responses from their most recent survey are interesting:

Economists in “the latest NABE Outlook Survey are divided as to whether a recession in the U.S. is likely in the next year. The median forecast calls for economic growth through 2024 to be modest. Interest rates are expected to decline and inflation is expected to slow in 2024, while job growth is anticipated to moderate, and the unemployment rate to rise.”

Why it matters: The NABE economic outlook is similar to ours at the Chamber. We see a slow economy in 2023 with a 65% chance of a recession this year.

Looking ahead:

  • We do not think interest rates are likely to fall in 2024 unless a significant, unforeseen shock happens to the economy.
  • On the debt limit, it’s impossible to know how long it would take for a breach of the debt limit to cause a global financial crisis, so it’s best not to test it.

Consumer Sentiment Drops Despite Resilient Economy

May 18, 2023

Consumer Sentiment Drops Despite Resilient Economy

The economy remains resilient in the face of high inflation and rising interest rates, but consumers’ feelings do not reflect that. According to a University of Michigan survey, consumer sentiment fell sharply from April based on a preliminary reading for May.

Why it matters: Usually, consumer sentiment and the fate of the economy are closely linked – they rise and fall together – because consumers spend more when they feel the economy is strong and less when they feel it’s weak.

  • That isn’t the case now. It could be that consumers are just ahead of the curve, and a downturn will start soon, or their feelings aren’t a good barometer of the economy.

Be smart: Consumer sentiment remains well below where it was at the height of the COVID shutdown despite the economy being in much better shape. It is only slightly above the all-time low hit in June of last year.

  • Further complicating the picture is that despite their sour feelings about the economy, consumers are still spending at a healthy clip, even after accounting for inflation.

So what gives? Consumers assume a recession is coming soon and it will be a long and bad one.

  • Frequent news about the need to raise the debt limit, and the chances Congress and the President might not agree to do so in time, dampened their mood this month also.


April Sees Retail Sales Increase Following Recent Declines

May 16, 2023

Retail Sales Up in April after Declines in March & February

Retail sales rose 0.4% in April. That comes after a decline of 0.7% over the last two months.

Why it matters: Even with the weakness in the previous two months, retail sales are well above where they were at the end of 2022 because of a huge 2.8% surge in spending in January. Consumers are still spending and still exhibiting remarkable resilience.

But: Consumers’ ability to spend is still likely to decline as the year goes on. Inflation is outpacing wage gains and savings are spent down while credit card balances have risen sharply.

By the numbers:

  • Sales were up at motor vehicles and parts dealers (0.4%), building material and garden supply stores (0.5%), health and personal care stores (0.9%), general merchandise stores (0.9%), miscellaneous stores (2.4%), and food and drinking places (0.6%).
  • Sales were down at furniture stores (0.7%), electronics and appliance stores (0.5%), food and beverage stores (0.2%), gas stations (0.8%), clothing and accessory stores (0.3%), and sporting goods and hobby stores (3.3%).

Be smart: As long as the job market remains robust and incomes remain steady, consumers will have money to spend, even if they are falling slightly behind inflation. This could keep spending stronger than in previous economic slowdowns.

Consumer Prices Rise 4.9%

May 12, 2023

The Consumer Price Index, the broadest measure of consumer prices, rose 4.9% annually in April, slightly below the 5% reading in March. That is down from the peak of 9.1% in June 2022, but still very high.

By the numbers:

  • On an annual basis, prices of necessities like electricity (8.4%), food at home (7.1%), and housing (8.1%) rose.
  • Gas, despite the monthly bump up, declined on an annual basis (12.2%).

Be smart: This is a status quo report, which, given the persistently high levels of inflation, is bad news. Particularly concerning is that core prices remain above the rate of overall inflation.

  • Housing prices are keeping core prices up, and they should ease later in the year, which should help take pressure off core price increases.
April Inflation was 4.9%

Looking ahead: The Federal Reserve is likely to pause interest rate hikes to give the rapid increase in rates time to work to bring prices down. But if core prices remain stuck around their current level, it will likely need to restart rate hikes to push it down.

Another Strong Jobs Report

May 10, 2023

The economy added 253,000 jobs in April, another strong report for job creation. Expectations were for 180,000, so we exceeded them again. We added 165,000 in March, so this was an increase, but job gains in February and March were revised down by a combined 149,000.

Labor Force Participation Chart

Why it matters: The hot labor market is a signal that the Fed’s anti-inflationary policies are not working well enough. But there are signs the market is slowing, particularly the February and March revisions.

  • This means the Fed will likely stick to its plan to pause interest rate hikes to give it more time to see the impact of the moves it has made.

Be smart: Even with the strong job numbers the labor force contracted by 43,000. Still, we are now 2.2 million workers above the pre-pandemic participation level.

  • But, if we had the same participation rate now as in February 2020, there would be almost 2 million more workers in the labor force. Employers continue facing a worker shortage crisis.

By the numbers:  

  • Wages rose 0.5% from March, and 4.4% annually from April 2022.
  • Education and Health added 77,000 jobs; Professional and Business Services 43,000; Leisure and Hospitality 31,000; Government 23,000; Construction 15,000; Manufacturing 11,000; Transportation and Warehousing 11,000; Mining and Logging 7,000; Wholesale and Retail Trade 5,500; Other Services 1,000; Information 1,000; and Utilities 1,000.
  • No industries lost jobs in April.

Job Market Still Tight

May 5, 2023

3.75 Million More Job Openings than Unemployed Workers

On Wednesday, the Fed raised its key interest rate from 5% to 5.25%, as expected, in part, because the job market remains incredibly strong. A tight labor market usually means upward inflation pressure.

Why it matters: A cooling economy should cause job openings to drop, but that is happening slowly.

Be smart: Businesses are still hiring at a strong clip and workers are still confident they can quit their jobs and find better ones easily.

By the numbers: The number of job openings remains near record highs.

  • Job openings were 9.6 million at the end of March.
  • That is down 384,000 from February.
  • But there are still 3.75 million more openings than there are unemployed workers to fill them.

And: Quits remain at high levels.

  • The quits rate was 2.5% in March. That is below the all-time high rate of 3%, but historically high.
  • 3.9 million people quit their jobs in March, down from the 4.45 million all-time high in March 2022, also still historically high.

Looking ahead: The Fed is likely to pause interest rate hikes for at least the next few months. It will be closely watching the jobs market in that period to see if it is cooling as it determines what to do with interest rates going forward.

Read more from the Chamber:

  • Economic Data: Comprehensive quantitative snapshots of business sectors and topics to help business and political leaders make informed decisions.
  • Workforce Data:Capturing the current state of the U.S. workforce.
  • Small Business Index: The MetLife & U.S. Chamber of Commerce Small Business Index is released on a quarterly basis and is compiled from 750 unique online interviews with small business owners and operators each quarter. The Index delivers a comprehensive quantitative snapshot of the small business sector as well as explores small business owners’ perspectives on the latest economic and business trends.
  • Middle Market Business Index:The survey panel consists of approximately 1,500 middle market executives and is designed to accurately reflect conditions in the middle market.

About the authors

Curtis Dubay

Curtis Dubay

Curtis Dubay is Chief Economist, Economic Policy Division at the U.S. Chamber of Commerce. He heads the Chamber’s research on the U.S. and global economies.

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