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- In a Monday report, KPMG senior economist Ken Kim noted that the unemployment rate is close to triggering the Sahm Rule, which signals a recession has started when the three-month moving average of the unemployment rate increases by 0.5 percentage points or more above the three-month average.
www.cnn.com/2024/07/10/business/economy-inflation-jobs-fed/index.html
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Sep 13, 2024 · When the yield curve, which is the difference between the 10-year and the 2-year, turns positive, or uninverts, right before the Fed starts cutting interest rates, a recession tends to kick in...
Aug 8, 2024 · Wall Street is increasingly jittery about the health of the U.S. economy. Here's what the experts say about the chances of a recession.
- Overview
- What's it going to take?
Here's the good news about the U.S. economy right now: Despite a wave of high-profile layoff announcements, most workers are still employed. Last week, the Bureau of Labor Statistics reported that the number of people filing for unemployment benefits fell to a nine-month low of 186,000. The unemployment rate remains at 3.5%, the lowest in a half-century. And there are about 10.5 million job openings.
Yet many economists believe we are heading for some type of economic recession. It just might not look like the recessions we've previously experienced in the U.S.
"I think the characteristics of this recession are likely to be different than prior ones," said Gregory Daco, the chief economist at Ernst and Young's EY-Parthenon consulting group. He cited two reasons: the state of household finances, like healthy savings rates and relatively low levels of debt, and demand for labor, which continues to be resilient.
"So we have not seen the type of severe pullback we usually see at the onset of a recession, where businesses look to cut costs rapidly," he said. "So the pullback is likely to be softer and more gradual than in the past. We're not going to see broad-based layoffs."
Why, then, could the U.S. still be marching toward a recession? Daco said consumer spending levels appear to have peaked several months ago. In addition, people have begun working fewer hours, and manufacturing activity has begun to pull back.
"So across the economy there are more indications that the economy is slowing down materially, and that’s typically the sign of the onset of a recession," Daco said.
Michael Antonelli, a managing director and private wealth manager at the financial services company Baird, said that to get a soft landing, inflation would have to fall significantly, corporate earnings would have to hold up, and the job market would have to stay strong.
The odds of sticking that “landing” are going to be tough — but not impossible — Antonelli said.
"A soft landing is a long shot by any probability — it's never really happened before," he said. "Any time inflation has been this high, we have a recession to bring it under control. There aren't a lot of historical analogies for a soft-landing scenario."
Many economists agree that the U.S. is, for now, not in a recession. The most recent gross domestic product report published last week showed the U.S. economy grew by 2.9% in the fourth quarter of 2022, following growth of 3.2% in the quarter before. That's more than enough to overcome one technical definition that a recession equals two consecutive quarters of negative growth.
But the same economists still foresee a "mild" recession's hitting soon.
“The mix of growth was discouraging, and the monthly data suggest the economy lost momentum as the fourth quarter went on,” Andrew Hunter, a senior U.S. economist for Capital Economics, wrote of the latest GDP report. “We still expect the lagged impact of the surge in interest rates to push the economy into a mild recession in the first half of this year.”
Aug 20, 2024 · With a slew of new economic reports and stock market volatility, consumers may be left wondering if the U.S. is in a recession. Here's what we know.
Aug 6, 2024 · Aug 6 (Reuters) - An unexpectedly weak U.S. employment report, featuring a post-pandemic high in the jobless rate, has rekindled worries a recession may be in the offing that would dash the...
Aug 4, 2024 · The increase – up from 4.1 percent in June, and up from a five-decade low of 3.4 percent in April last year – sets the stage, more than ever, for a cut in interest rates in the next Federal Reserve...
Apr 27, 2023 · WASHINGTON (AP) — The government’s report Thursday that the economy grew at a 1.1% annual rate last quarter signaled that one of the most-anticipated recessions in recent U.S. history has yet to arrive. Many economists, though, still expect a recession to hit as soon as the current April-June quarter — or soon thereafter.
