2023 was full of economic uncertainty, through global conflict, supply chain and inflation woes, and a struggling job market. The beginning of the year signaled “the most anticipated recession of all time” and left consumers scrambling. Now? Conversations around a recession seem out of sight as economists re-chart our financial paths.

1. A Soft Landing

“Remarkable resilience:” That’s how members of the International Monetary Fund described the global economy in early 2024. Although individual monetary conditions may seem tense, improvements such as resolved supply chain issues and a growing economy are providing a glimmer of hope for economists and consumers alike. While growth and trade remain historically low, we’re still heading towards a “soft landing” in 2024 according to the IMF, compared to a more disastrous descent.

Cooling Down: Since 2022, consistently rising inflation rates have had consumers shaking more than any other financial fear. But many economists forecast the slowing of inflation will continue in to 2024, and financial services experts at Morningstar expect inflation to return to normal levels, and settle under the 2% target set by the Federal Reserve over the next four years. There are some inhibitors to this though, as Deloitte notes, particularly in labor-intensive services still dealing with accelerated inflation. Their labor market is still squeezed, leading to rising costs and preventing overall inflation decreases.

Don’t exhale just yet, as global tensions are arising in multiple areas of the world. Student loan payments resuming in late 2023 could provide new economic hurdles for the over 43 million Americans currently repaying them. And last month, credit card debt in the U.S. reached a record high of $1.13 trillion, according to the Federal Reserve Bank of New York. Even with all our achievements, many financial fears will continue to loom in 2024.


2. Generation Z and the Online Economy

As more and more of Gen Z joins the workforce, their spending power and economic impact increases as well. They’ve entered the financial landscape at a crucial moment, defined by inflation, housing crises, gas prices and more – which have shaped their unique economic viewpoints and choices. Their different interests, goals and financial behaviors are re-shaping the economy daily.

New Habits: According to Morning Consult, Gen Z is the only generation to prefer online shopping over in-person and 37% say debit cards are their primary payment method. But it’s not just their economic preferences redefining norms, their sentiments are as well. 25% identify themselves as scraping by financially, yet 60% are still optimistic they will retire before 65.

Gen Z is driving the shift towards digital spending, especially in emerging markets such as telehealth, virtual reality, cryptocurrency and content creation – one in 10 Gen Z-ers have spent money in these categories. Overall, those ages 18-34 spend approximately $100 a month in the digital economy, according to Deloitte.

Other generations are joining in on the fun, too. Even though those ages 55+ may only spend $30-40 a month digitally, these trends in spending are still bigger than ever, with 2.7% of the average consumer’s wallet going towards the digital world (compared with 3.9% for clothing and 3.5% for electronics.)


3. What’s Next? (A sneak peek of our 2024 GSI Report)

So, where are we going next? As sentiments change globally and uncertainty makes us all, well, uncertain, it’s more important than ever to make sure we keep up with each other – especially with those closest to us in the Gulf South. Our 2024 Gulf South Index by The Ehrhardt Group and Causeway Solutions delves into not only how we’re spending or saving our money, but how we feel about our finances overall.

1 Star Reviews: When rating the U.S. economic situation on a scale of 1 to 5, more and more Gulf South residents are sharing their stars sparingly. Today, 23% of the Gulf South rates the economy just 1 star, compared to 19% in 2023. While nationally, just 16% currently feel the economy deserves a single star rating. Even with the knowledge of cooling inflation and an economic soft landing, people in the Gulf South are still feeling the heat.

But some things stay the same, as for the second year in a row, the economy is still the number one issue plaguing residents both in the Gulf South and across the country. 38% in the Gulf South and 31% nationally believe the economy to be the most important issue facing people today. The next most important issue, immigration, drops down to 15% for both groups.


So, while we might not expect “the greatest recession of all time” to show up anytime soon and some financial fears are showing signs of subsiding, our economic future is still rife with uncertainty. As some issues retreat, new ones (and new generations) emerge with their own obstacles and impacts. It certainly is not all bad news, and although some in the Gulf South seem dismal, 43% of us are also more optimistic about 2024 than we were about 2023. The more time we spend understanding our behaviors, sentiments and decisions, the better equipped we are to handle anything 2024 may throw at us – the opportunities and the challenges.

Marc Ehrhardt
The Ehrhardt Group