The US economy defied expectations of a recession this year, helped by a resilient consumer and strong labor market.

And looking ahead to 2024, Moody's Analytics Chief Economist Mark Zandi is confident the economy will continue to 'move forward.'

"As long as American consumers hang tough and continue to do their part, continue to spend, I think the American economy will continue to move forward." Zandi told Yahoo Finance Live. "All the factors look pretty good: sub-4% unemployment, wage growth that's stronger than the rate of inflation, a fair amount of savings and a stock market that's close to record highs."

Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.

Video Transcript

SEANA SMITH: Well, let's talk about the economic backdrop because jobless claims out this morning, 205,000 Americans filing for first time unemployment benefits last week. Now, that is less than expected and also the latest sign that the economy is holding up much better than forecasters had initially expected. Real GDP is on track to grow 2.5%, unemployment remaining below 4%, and inflationary pressures are abating. But will this momentum continue into 2024? And what will the US economy look like?

We want to bring in Mark Zandi. He's Moody's Analytics chief economist. Mark, you're the perfect person to talk to about this. Obviously, you have been out with troves of data over the recent weeks, recent months here just tracking the performance that we have seen. The economy has held up much better than most forecasters had anticipated. What does that then tell us about next year?

MARK ZANDI: Well, I think it should be a reasonably good year. I think as long as American consumers hang tough and continue to do their part, continue to spend, I think the American economy will continue to move forward. And all the factors that you consider when considering consumer spending look pretty good. Lots of jobs, you mentioned the sub 4% unemployment rate. Wage growth is now stronger than the rate of inflation because of the throttling back of inflation.

Still a fair amount of excess saving among high income, high middle income households. Stock market, pretty close to a record high. The housing value's close to record high. Most households have done a pretty good job of locking in the previously low rates. Low income Americans, they're struggling. But middle and high income Americans are doing quite well. I think they'll continue to spend, and the economy should be fine.

BRAD SMITH: I mean, that's a lot of pressure on me, you, on Seana, on everybody that's watching here today, Mark, just to continue spending, continue to showcase resiliency.

MARK ZANDI: I know. It's so tough. That's such a tough thing to do, keep spending.

BRAD SMITH: Yeah, exactly. I mean, Mark, when you think about if there are cracks in the resiliency of the consumer that are starting to show right now, where would they be? Where would you point to?

MARK ZANDI: Yeah. I mentioned low income households. They are under a significant amount of pressure. You know, they got nailed by the high inflation. Even though inflation is moderating, we're all still paying a lot more for everything compared to a couple three years ago. I mean, food, housing, gasoline prices. So that's hurt.

And of course, low income households have turned to credit cards, consumer finance loans, and taking on debt. And now with these high interest rates have to pay more in interest expense. So that's where-- if there's an Achilles heel in the consumer, it's there. That's where I think the pressure will be.

But here, just a statistic, folks in the top third of the income distribution, they account for 2/3 of the spending. So the American economy can't flourish unless we're all participating and everyone's able to enjoy the fruits of the better economy. But it can continue to move forward if high income, high middle income households continue to spend.