2024 Preview: 5 Economy Trends to Watch Next Year

It’s the question on everyone’s mind: What’s going on with the economy right now?

No one really knows. It’s a weird time, maybe unprecedented, for all sorts of reasons. Anyone who tells you they know for sure what’s coming in a year or two, let alone three or four, is overconfident at best.

With that said, we can make some low-confidence predictions about how things could evolve over the next 12 months. 

One thing we know for sure is that 2024 is shaping up to be a pivotal year. So it’s important to play out the near future, even if we get the details wrong. Let’s take a look at five trends that could directly impact the United States’ (and the world’s) economic trajectory next year and beyond.

1. The Remote/In-Person Debate Could Reach a Stalemate

Why should we care whether more workers return to the office or the professional class maintains its semi-remote status quo?

Because it’s increasingly clear that while the work-from-home movement was a boon for workers’ mental health and personal development, it’s a drag on the knowledge economy’s productivity. This has many executives asking — or begging, if not mandating — their employees to return to in-office work on at least a part-time basis.

Those expectations are optimistic, if not unrealistic. For the next year and probably longer, it’s likely we’ll reach a sort of stalemate between the two camps. The flow of workers back to the office could slow, even as employers mandate part- or full-time in-office work for new employees. 

That’s the bet being made by investors and entrepreneurs like Steve Streit, founder and lead partner of SWS Venture Capital, and big-company executives like Citigroup’s Jane Fraser. Time will tell if it’s a smart one.

2. We’ll See the First “Scary” AI Breakthrough

Open AI’s Sam Altman caused a stir earlier this year when he predicted “scary AI” wasn’t far off. Some accused him of overhyping his company’s product for commercial gain, or to spur regulators to freeze the playing field in his favor. But given what we can all see with our own eyes, should we really bet he’s wrong?

We shouldn’t. And the tipping point could come sooner than we expect. Mark down 2024 as the year we see the first AI agent that makes us sit up and say, “This just got real.”

3. Interest Rates Will Come Down a Bit (But Not By Enough)

Turning to fiscal policy, it seems likely that the U.S. Federal Reserve will cut their benchmark interest rate in 2024. 

The question is when and by how much. The answer, in turn, depends on the overall health of the economy. If we’re in a proper recession by the middle of 2024, the Fed could face pressure to cut faster and farther than it intended.

That would create tailwinds for businesses and consumers feeling the pinch right now. Yet it’s not certain that even an aggressive cutting scenario would be enough to prevent a recession. Some forecasters believe that’s already baked in.

4. Green Tech Investment Could Accelerate

Green tech is among the many sectors under pressure from high interest rates. For those concerned about climate change and other environmental ills, this feels like a deadly-serious risk.

But a deeper dive reveals some cause for optimism. In the past year alone, manufacturers have announced tens of billions of dollars in new investments in the United States and Canada. After a generation during which North American manufacturing policy could be summed up in one word — “offshoring” — the region’s factories are springing back to life. 

5. Inflation Will Normalize, But That Might Not Be Enough for Consumers

Turning back to fiscal policy, it seems likely that inflation will return to historical norms sometime in 2024 and stay there for a while. 

Unfortunately, consumers might not notice. Or if they do notice, they won’t much care. That’s because nominal prices have increased dramatically since 2020, making everything feel more expensive. 

Prices would have to fall to change public perceptions. This “cure” would be worse than the disease.

Get Ready for a Big Year

It bears repeating that 2024 is shaping up to be a pivotal year for the economy. And with a federal election coming up in the United States toward the end of the year, the stakes couldn’t be higher. What happens in the next 12 months could affect the course of the country’s — and world’s — development for a long time to come.