The Real Economy

The Real Economy: June 2023

A recession is likely over the next 12 months, but what are the chances that the economy has a soft landing?

The Federal Reserve's efforts to slow the economy with interest rate increases is having an effect on the American economy, slowing demand and leading to tightened financial conditions. A recession is likely over the next 12 months, writes RSM US LLP Chief Economist Joseph Brusuelas in the June issue of The Real Economy. Still, areas of the economy have proved to be quite resilient.

On one side of the equation, the labor market remains strong, along with consumer spending. But on the other side, loan officers at banks are seeing a notable decline in demand for credit from businesses, Brusuelas writes.

Adding to the pressure is the commercial real estate sector, which has many loans that are now in question. RSM's Brandon Koeser and others analyze the current market and offer guidance over how to navigate this difficult stretch.

While recessionary risks are rising, it appears that firms continue to hire, households continue to spend, and the economy continues to grow.
Joe Brusuelas, Chief Economist

Finally, there is the arrival of generative artificial intelligence, which will have a profound impact on America’s real economy. Ready or not, law firms need to deal with a future that includes this breakthrough technology. Sonya King and Joy Cruz offer some ideas on how to prepare.

We look at these issues and more in the June issue of The Real Economy.

Inside the June issue


Middle market trend watch: Resilience in the real economy

Middle Market Business Index
Resilience, not recession, is the primary takeaway for the American economy from the most recent RSM US Middle Market Business survey.

Resilience, not recession, is the primary takeaway for the American economy from the most recent RSM US Middle Market Business survey.

Despite shocks to the real economy over the past two years, overall business conditions remained solid as the top-line sentiment indicator eased to 131.3 in the second quarter, down modestly from 134.0 in the first quarter on a seasonally adjusted basis.

While executives expressed optimism about the economy over the next six months, their current views were tempered by lingering inflation, higher wage costs, and the recent disruption among small and regional banks, the survey found. It’s a dichotomy that came through in the survey, which is based on data gathered from 404 respondents between April 3 and April 24.

RSM contributors

Discussing the economic challenges ahead

Join our Chief Economist Joe Brusuelas and U.S. Chamber of Commerce Executive Vice President Neil Bradley for their discussion on matters affecting middle market businesses.

From workforce and supply chain challenges to addressing consumer behaviors and profitability, they’ll examine the economic headwinds facing companies and how businesses can address ongoing risks and challenges. 

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The Real Economy Blog was developed to provide timely economic insights about the middle market economy. It is offered as a complement to RSM’s macroeconomic thought leadership, including The Real Economy monthly publication and the proprietary RSM US Middle Market Business Index (MMBI).

The voice of the middle market

Middle market organizations, which make up the “real economy,” are too big to be small and too small to be big. They have distinct challenges and opportunities around resources, labor, technology, innovation, regulation and more.