U.S. economists predict that the economy will go into recession in the next 12 months. This is not what Democrats want to hear before the midterm elections.
Bloomberg Economics’ economic forecast projects that there will be no recession in October 2023. This is an increase of the previous report which had estimated that there would be 65% chance of a recession within 12 months.
To predict the likelihood of a recession, the model relies on 13 financial and macroeconomic indicators. Bloomberg predicts that there will be a recession in the next 11 month at 73%. The 10-month probability is at 25%.
Bloomberg economists stated that persistent inflation and the expectation of Federal Reserve rate increases are contributing factors to the risk for contraction.
After the real gross domestic products fell for two consecutive quarters, the U.S. economy entered recession in July. According to the Bureau of Economic Analysis, GDP (inflation-adjusted value of goods or services sold by the economy) fell 0.9% in the second quarter of 2022. The rule of thumb for determining if there is a recession is whether GDP falls in consecutive quarters.
While enjoying ice cream in Portland on Saturday, Biden declared the economy “strong and strong as hell”.
“I don’t care about the strength and stability of the dollar. I am concerned about the rest. Biden stated that the economy is as strong as it gets. “Inflation is everywhere. It is worse than in the United States. The problem is not our lack of economic growth, but the lackluster policies in other countries.
Jared Bernstein, a member of the White House Council of Economic Advisers, said separately to Fox News Sunday that the strength of the economy is causing government revenues to rise.
A report from the economic department last week revealed that inflation rose faster than expected in September. The headline inflation rate was 8.2%, which is close to a four-decade record. Americans may want jobs, but they are being squeezed as each dollar they earn and every dollar that they save is less.
According to a recent New York Times/Siena College survey, the economy and inflation are the most important issues for most voters. Voters who are concerned about the economy and inflation believe that Republicans will do a better job than Democrats 64% to 30 percent.