Is the US Already in a Recession? Economists Divided
By Is the current economic climate indicative of a recession?[0] Economists have differing opinions.[0] According to Dana Peterson, the chief economist of The Conference Board (an economic think tank), there appears to be recessionary signs in the data. She states that a recession is expected. The indicators that we use to gauge economic activity suggest that it is happening presently.[0]
A recent survey of CEOs in the U.S. found that most of them think a recession is coming or even that we might already be in one.[1] US consumer price and retail sales data this week, however, showed persistent inflation and robust demand that risk prompting the Federal Reserve to raise interest rates even higher than previously expected.[2]
January inflation figures being higher than anticipated led to some worries that the decrease in inflation, which is known as disinflation, had been put on hold.[3] Tuesday's inflation report revealed that annual consumer prices had risen more than predicted, indicating that the economy was resisting the Federal Reserve's attempts to slow it down.[4]
As per the Commerce Department data released on Wednesday, retail sales went up by 3 percent in January, which is the largest monthly increase in nearly two years. Retail purchases overall saw a 3% rise in January, the largest growth since March 2021, as reported by the Commerce Department. The figures are not taking inflation into account.[4] Motor vehicle dealers, furniture stores and restaurants were the main drivers of the increase in all 13 retail categories last month.[4]
Governments placing further restrictions on services trade are making it increasingly difficult for the global economy to recover from the aftereffects of the Covid pandemic and the war in Ukraine.[5] The OECD index showed that new measures across all sectors had an average increase of five times in 2022 compared to the year before.[5]
Household finances are feeling the strain of increasing borrowing costs and continued price hikes, resulting in debt levels that are now the highest they have been in twenty years.[5]
Data from the United States continues to be better than expected.[2] It does not seem as though the Federal Reserve's attempt to reduce consumer demand by raising interest rates has had a significant effect thus far.[2] Retail Sales Increase 3.0% in January, Reversing the Previous Two Months' Declines The growth was spread across multiple[2] Core control group sales increased by more than the anticipated 1.7%.[2] The Empire manufacturing survey showed an increase from -32.9 to -5.8, indicating that the sector may have brighter prospects ahead.[2]
0. “Is the economy headed for recession or a soft landing?” GPB News, 17 Feb. 2023, https://www.gpb.org/news/2023/02/17/the-economy-headed-for-recession-or-soft-landing
1. “Are we heading toward a recession? Here's why economists are divided” Aspen Public Radio, 18 Feb. 2023, https://www.aspenpublicradio.org/2023-02-18/are-we-heading-toward-a-recession-heres-why-economists-are-divided
2. “Higher Core Yields Slightly Favoured the Dollar” Action Forex, 16 Feb. 2023, https://www.actionforex.com/contributors/fundamental-analysis/486701-higher-core-yields-slightly-favoured-the-dollar/
3. “Economists still worry recession could be on the way. But here's how a soft landing may still be possible” CNBC, 16 Feb. 2023, https://www.cnbc.com/2023/02/16/economists-worry-about-a-recession-but-a-soft-landing-may-be-possible.html
4. “US Economy Keeps Charging Ahead, Adding Pressure on Fed to Hike” Yahoo! Voices, 15 Feb. 2023, https://www.yahoo.com/now/us-economy-keeps-charging-ahead-171126908.html
5. “Charting the global economy: New barriers to trade hamper world economy's recovery” Economic Times, 19 Feb. 2023, https://economictimes.indiatimes.com/small-biz/trade/exports/insights/charting-the-global-economy-new-barriers-to-trade-hamper-world-economys-recovery/articleshow/98057477.cms
