Predictions for 2023
It’s time (past time, really) for Sage Economics to send out our predictions for 2023. We’re going to have a post grading our predictions for 2022, but some of them can’t be graded until year end data is released. In the meantime, just assume they were all correct.1
We’re changing up the format this year: Anirban and I will each give five wild card predictions that can be about whatever we want, and then we’ll each give specific forecasts for a few different economic indicators for the first and second half of the year.
The specific forecasting keeps us from saying things that are technically correct but comically inaccurate, like my (Zack’s) 2022 prediction that “inflation will keep rising at a 3%+ annual clip.” That’s like a basketball scout in 1983 predicting that Michael Jordan would be an above average player or a meteorologist in 79 A.D. forecasting an unusually warm August in Pompeii.
Anyway, let’s do this:
Average Monthly Job Growth
First Half 2023
Anirban: +75,000
Zack: +125,000
Second Half 2023
Anirban: -150,000
Zack: +40,000
Unemployment Rate
June 2023
Anirban: 4.0%
Zack: 4.0%
December 2023
Anirban: 4.7%
Zack: 4.2%
Real GDP Growth
First Half 2023
Anirban: 1.6%
Zack: 1.0%
Second Half 2023
Anirban: -0.9%
Zack: 0.2%
Year-over-year Inflation (CPI-U)
June 2023
Anirban: 3.9%
Zack: 3.0%
December 2023
Anirban: 2.4%
Zack: 2.5%
Federal Funds Rate – Upper Limit
June 2023
Anirban: 5.25%
Zack: 5.25%
December 2023
Anirban: 5.0%
Zack: 5.0%
Wild Card Predictions
Where possible, I included links to the data series we’ll use to resolve whether a prediction is correct or not. Some of them (like Anirban’s prediction about Elon) are binary and don’t have an underlying data source. Others, like my prediction about murder rates in the 25 largest cities, have too many data sources to link to.
Anirban’s Predictions
Recession arrives in mid-2023.
Vladimir Putin is sent to Siberia. The Ukrainians feistily survive the winter and continue to batter Russian supply chains in the East. Putin is deposed. Alexei Navalny is released from prison.
U.S. manufacturers continue to withdraw production from China, with India, Vietnam, Malaysia, Indonesia, and North America among the primary beneficiaries.
Auto prices fall dramatically as both new and used inventory piles up on dealer lots.
Elon Musk is replaced as CEO of Tesla.
Zack’s Predictions
The labor force participation rate will stay below 63% (pre-pandemic it was 63.3%).
At least 12% more new homes will be sold in 2023 than in 2022.
Murder rates will fall in aggregate across the 25 largest U.S. cities.
No movies in 2023 will outgross Top Gun: Maverick or Avatar: The Way of the Water at the domestic box office. (If this prediction is wrong, it will be because of the second Dune movie)
Baltimore will have fewer than 12 inches of snow during the 2022-23 winter.
They were not, in fact, all correct.