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Report: Probability Of Recession Soars

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Joe Biden

Economists estimate that the probability of the United States entering a recession is at “44% in the next 12 months, a level usually seen only on the brink of or during actual recessions,” according to a survey from The Wall Street Journal released over the weekend.

“Since the Journal began asking the question in mid-2005, a 44% recession probability is seldom seen outside of an actual recession,” the report stated. “In December 2007, the month that the 2007-to-2009 recession began, economists assigned a 38% probability. In February 2020, when the last recession began, they assigned a 26% probability.”

“Forecasters have raised recession probability due to a number of factors: higher borrowing costs, a blistering pace of inflation, supply-chain problems and commodity-price shocks stemming from the war in Ukraine,” the report added. “Mostly, however, they see dimming chances that a steeper path of rate increases by the Fed can cool inflation without inducing higher unemployment and an economic downturn.”

The survey comes shortly after the Bureau of Economic Analysis announced that the United States economy shrank at a 1.5% annual rate during the first quarter of 2022.

Along with a shrinking economy, inflation in the United States has reached the highest level since December 1981 as prices in May 2022 rose 1% from previous month and 8.6% from the year before, according to a separate report from the Bureau of Labor Statistics.

Despite the terrible economic numbers, President Biden told reporters last week not to believe warnings from economists about a recession.

“You’ve got serious economists who warn of a recession next year… What should Americans believe?” AP reporter Josh Boak asked Biden.

“They shouldn’t believe a warning. They should just say: ‘Let’s see. Let’s see, which is correct,” Biden responded.

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