Experts Predict of a Looming Economic Recession in the US
Since 2022, various experts and economists have predicted an economic recession in the United States, and time has passed with many supporting these claims. A few others have disagreed, while some like the Federal Reserve (Fed) have admitted an impending crisis but have reassured that it will not be very significant. Despite the predictions, several companies have laid off thousands of their employees to prepare their finances for the anticipated economic scratch. Companies like Twitter, Meta, Microsoft, 3M have implemented cost-cutting measures to ensure their financial survival.
The Inflation’s Negative Impact on the US Economy
The high inflation rate has added another layer of fear to the already uncertain economic situation. With historical records being set in 2022, exceeding 9% year-on-year, high prices have caused problems for those struggling to make ends meet. So far, the Fed has raised its interest rates on several occasions to curb inflation. Though the results have proven to be slow, the effects have become visible in mid-2023.
The US Resilient Economy Despite Layoffs
Various sectors, mainly in technology, have experienced several layoffs. However, job creation has still managed to add an average of 310,000 active people in the United States’ formal payroll, according to the Department of Labor’s data.
The US Real Estate Market Predicament
The high mortgage rates, as well as the high costs of both renting and buying a house in the country, have caused a significant impact on the real estate scene. This situation has left the US real estate market in limbo.
Experts Offer Divergent Views on the Economy By End of 2023
According to Amanda Agati, Chief Investment Officer of PNC Financial Services Asset Management Group, “the market has told us that there is no recession and no correction, no more rate increases”. Although several experts like Joe Brusuelas, Chief Economist at RSM, have said that the US economy is resilient and not headed into recession, some still believe that there are still possibilities of an economic recession coming to the United States.
“It doesn’t look like this year, maybe early next year. We need some kind of shock to have a recession. The energy could have been one, the debt ceiling showdown could have been one, and still could” added Brusuelas. Meanwhile, some believe that the odds of a recession have remained low due to the continued employment of the American people which makes it almost impossible to have a recession with such a low unemployment rate.
“The US economy is holding up reasonably well, but it faces several headwinds in the second half of the year, including the lagged effect of tighter monetary policy and tighter credit standards,” opine several Oxford Economics analysts.
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