2023 Economic Outlook: Losing Altitude

Table of Contents

May 17, 2023 | Written by: Sarah House, Senior Economist and Managing Director of Wells Fargo Corporate and Investment Bank

Likely Recession in 2023, Hopeful for a Softer Landing

In the ever-shifting landscape of global economics, we find ourselves at a precarious junction, straddling the fine line between optimism and concern. As we approach the horizon of what could potentially be a period of economic turbulence, a question looms large in the minds of analysts and policymakers alike: Will our collective efforts steer us towards a graceful and controlled descent, or are we inching closer to the precipice of an impending recession?

Our trusted Referral Partner, Patricia Hoelle, recently shared an Economic Outlook relevant to the remainder of 2023: 2023 Economic Outlook—Losing Altitude.

A few meaningful highlights Patricia pointed out were:


As of April, inflation was down from appx 9% to an average of 5.5%

  • Consumers have adjusted to higher prices, but are more discerning with their spending.
  • Supply chain issues have eased, bringing more supply to keep up with a still-strong demand.


Labor costs are still higher than average as the job market is still compressed. The worker shortage has continued to keep pressure on wages, though they seem to be cooling.

  • Declines and slow growth in the working age population suggest a longer-term problem.
  • Job growth remains strong but temporary labor and layoffs are beginning to factor in.


The fed appears to be slowing down on rate hikes and have plenty of room to maneuver if/when a recession comes. This Wells Fargo Outlook does not anticipate rate cuts in the near future.

Lending from Banks

Banks are still in the business of providing capital, but some areas have tightened significantly.

  • Investment Real Estate (especially office, and even in medical office real estate) have tightened.
  • It’s important to note: Lending to Commercial and Industrial businesses, as well as small businesses is remaining strong with Wells Fargo.


The housing market remains strong due to low inventory and high-demand. Although the market has slowed (due to rising rates), the worst of the pullback is projected to be behind us.

  • Builders are working around these problems and are continuing to add to inventory; however, new build strategy is becoming creative when it comes to size and efficiencies.
  • Single Family permits were up for Q2 vs Q1

Customer Spending

Consumers are still spending, but are shifting back toward services.

  • Excess household savings is declining (getting back to pre-covid numbers) and reliance on revolving credit is increasing. However, revolving credit has not exceed 2018 numbers, and is nowhere near as high as 2008 debt data.


In reference to page 22 of the report, we found the expectation of a recession and data around a softer landing extremely relevant to current concerns.

  • A less dramatic recession projection with a -1% dip to GDP peak and a 1.4% gain to the unemployment rate.
  • These data points point to a soft landing, with less of an impact than 2020 figures, much less 2008.

Asheville Regional Economic Specifics

Pages 23-25 of 2023 Economic Outlook—Losing Altitude indicate the local economy looks decent in projected numbers, specifically in relation to job growth, residential real estate and population growth. Unfortunately, Asheville falls short in housing supply and costs. While it isn’t mentioned in the report, according to lenders, the average American family should spend an average of 30% of income on housing; however Asheville residents spend approximately 52%.

Remember to click here to read and download the full report from Wells Fargo:

Wells Fargo Economic Outlook - Published May 17, 2023.

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