BMO Harris Bank has released its latest report, the BMO Blue Book, which provides an in-depth analysis of the U.S. economy and its performance in 11 specific regions. According to the report, the U.S. economy is expected to decelerate in early 2024 due to aggressive monetary tightening measures.
The BMO Blue Book offers insights into various regions across the country. Northern California, for example, is experiencing cooling economic activity and a focus on efficiency. Southern California, on the other hand, anticipates a soft landing with strong performance in job growth sectors. Colorado is facing housing market pressure but maintains stability. Texas expects growth through investments and workforce optimization. Wisconsin demonstrates resilience and innovation amid economic fluctuations. Illinois benefits from tech sector investments for diversification. Florida leads in growth and is awaiting potential interest rate relief to stimulate business activity.
"The U.S. economy remains resilient, with real GDP appearing to have picked up to a 4.5% annualized rate in Q3 from 2.1% in Q2. That is not to be expected following the most aggressive course of monetary tightening in four decades," said Michael Gregory, Deputy Chief Economist at BMO. "However, the economy looks to decelerate next year. High borrowing costs and rising home prices have sent affordability to the worst levels in nearly 40 years."
The report also highlights the contrasting performance of different sectors. While consumer spending has slowed, negatively impacting areas such as retail and consumer finance, other sectors like manufacturing and distribution are still positive. BMO Harris Bank, with its experience of over 200 years, aims to help its commercial clients navigate these challenging times.
Overall, the BMO Blue Book report portrays a resilient but slowing U.S. economy, with expectations of a deceleration in early 2024. The report provides valuable insights into regional economic trends and the challenges and opportunities faced by different areas of the country.