No recession in the near term, but the US economy will weaken in 2024, according the University of California Los Angeles Anderson Forecast.

The measure cited robust growth in retail sales, growth in the backlog of durable goods and soaring factory construction as grounds for its “no-recession” forecast. It also predicted the Fed will increase the federal funds rate by 25 basis points this fall.

There are several other reasons the much-anticipated recession isn’t coming, according to the report. “First, monetary policy tightened at the same time as fiscal policy eased,” the report said. “The combination of the CHIPS Act, the Infrastructure Act and the Inflation Reduction Act added significant demand to the economy and increased investment. In addition, the interest-sensitive sectors of housing and autos were not overbuilt. Instead, they were still recovering from unmet demand during the pandemic.”

It also noted auto and light truck manufacturing has been increasing. In addition, high gas prices have increased demand for electric vehicles, and automakers have made large investments to meet that demand.

“The oft-predicted but never seen ‘recession next quarter’ has now faded in the face of expansionary fiscal policy, new national industrial policy and a consumer who is happy to continue spending,” according to the forecast.  “Nevertheless, the impact of higher interest rates will be felt in restraining growth in 2024.”

Still, it noted risks ahead, including the possibility of geopolitical events upsetting current growth patterns and the election resulting in a different national economic policy in 2025.