Global Economy Continues to Cool; Is Recession Imminent? IPC May Economic Outlook Report

Per IPC’s May 2023 Economic Outlook report, the global economy continues to cool, but not quite as severely as expected at the start of the year. Stronger-than-expected growth in 2023 will come at the cost of weaker growth in 2024.

Labor markets remain extremely strong, despite the widely held view that recession is imminent. Both the United States and Europe are enjoying record low levels of unemployment. Strong labor markets and solid wage growth are likely to keep inflationary pressures stubbornly high.

“Consumer confidence fell sharply in the last month, erasing half of the gains since the all-time low levels of June 2022. Business confidence has also been weak. Manufacturers report a subdued outlook in both the U.S. and Europe,” said Shawn DuBravac, IPC chief economist. “Leading economic indicators continue to suggest a high risk of recession this year, even if the timing continues to push later into the year,” DuBravac added.

Additional data in the May 2023 IPC Economic Outlook show:

  • U.S. consumer sentiment fell in May, declining nearly 7 percent. The debate over the debt ceiling likely contributed to some of this decline.
  • U.S. manufacturing sentiment contracted for the fifth consecutive month in April. The manufacturing PMI rose 0.8 percentage points in the last month, but not enough to move back into expansionary territory.
  • The European economy grew during the first quarter of the year, edging up 0.1 percent in the euro area and up 0.2 percent in the EU.
  • Electronics manufacturing output fell in March, decreasing a sharp 5.9 percent from the prior month and 1.7 percent from the year-ago period.

View May 2023 IPC Economic Outlook. For more information on IPC’s industry intelligence program including current research and reports, visit

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