Is the US about to collapse out of recession?
It depends who you ask. and the day of the week.
Fifty-four percent of corporate and trade group economists put the odds of a recession in the next 12 months at 50 percent or less. Forty-four percent say there is a better chance of a recession, according to the reconnaissance conducted from the 4th to the 12th of April National Association for Business Economics.
This indicates an inversion of NABE January poll Of a similar group I found 54% viewed a recession within 12 months as a possibility.
Their somewhat brighter outlook likely has to do with improving sales at their companies, says Ken Simonson, a NABE analyst and chief economist for Associated General Contractors, a construction industry trade group.
Forty-six percent of the economists surveyed reported increased sales at their company over the past three months, and only 17% indicated a decrease in sales. In January, 38% indicated sales were up and 30% said business was declining. Simonson says that economists likely believe that the rise in their companies’ revenues indicates stronger growth in the economy overall.
Payment refused?:As the U.S. job market slows, starting salaries are dropping in some sectors, the payroll company says
Student loan guide:You can still get student loan forgiveness in these states even if Biden’s debt plan fails
He also says, “Inflation has subsided, and employment is still increasing.” He says supply chain bottlenecks that led to product shortages have improved significantly.
The companies surveyed are members of NABE and include manufacturers and service companies.
Is the economy good now?
The survey was conducted after the Labor Department reported that employers added 236,000 jobs in March, a historically strong total but a marked slowdown since early in the year.
However, the survey followed news that retail sales and industrial production fell in March, developments that led some economists to see a decline as the potential for growth increased.
That harsher view was already gaining traction after last month’s Silicon Valley bank crisis prompted banks to make it more difficult for consumers and businesses to get loans.
Simonsohn says he doesn’t think the latest reports on retail and manufacturing sales would have changed the view of NABE experts.
Are job opportunities increasing or decreasing?
However, the survey paints a decidedly mixed picture of the economy.
Only 15% of economists said employment at their companies increased over the past three months, the smallest percentage since October 2020. Only 15% expect employment to rise over the next three months – the second lowest since April 2020 – while 19% expect salaries to decline.
Simonsohn says those numbers are consistent with an economy that could lose jobs in the coming months, and job losses are often associated with recessions.
It’s likely, he says, that most economists still expect a downturn but believe it will happen later than expected, beyond the 12-month horizon specified in the survey.
Lift Hairstyles:Lyft layoffs announced by CEO David Rescher as the tech industry sees more and more job cuts
Why does the Federal Reserve increase interest rates?
The vague forecasts depicted in the survey reflect a recession that has been projected since early 2022 but has been repeatedly delayed. The Federal Reserve has aggressively raised interest rates over the past year in an effort to weaken the economy enough to curb a pandemic-related surge in inflation, a campaign expected to send the economy into a tailspin. Although inflation has eased, it is still very high and the Fed expects to raise interest rates at least once more.
But while the economy has slowed, it has not turned south. Employers have been reluctant to lay off workers amid a protracted labor shortage. And consumers have relied on higher wages and savings from the COVID-related stimulus to deal with inflation and higher interest rates.
But those savings from COVID are dwindling. Households accumulated a record $180.3 billion in credit card debt last year, according to WalletHub, and delinquency cases have risen sharply.
Joseph LaVorgna, chief economist at SMBC Nikko Securities, believes that a recession is still coming; It takes longer to arrive.
“It feels like a ‘slowdown,'” LaVorgna wrote in a note to clients. “The economy is bending but not yet broken.”
“Amateur organizer. Wannabe beer evangelist. General web fan. Certified internet ninja. Avid reader.”
More Stories
Bitcoin Fees Near Yearly Low as Bitcoin Price Hits $70K
Court ruling worries developers eyeing older Florida condos: NPR
Why Ethereum and BNB Are Ready to Recover as Bullish Rallies Surge