Speculation on wether we are in a recession or not or if we are headed toward one has been a conversation for a while now as a recession has now turned into something more subjective but Peter Schiff says that we are already in a recession. He says that because now that we have a positive Q3 that it gives people more of a reason to deny that we were or are in a recession but that we cannot forget the two negative GDP quarters. He says several reports that "scream" we are in a recession, the first is that the Kansas city manufacturing index came in at -6 and -7 the last two months and this means that there was a contraction in the manufacturing industry, Overall US industrial production is down .1%. He says the contraction numbers show us that even if we don't want to panic people into thinking we are in a recession show that we are. We have always measured a recession as two negative GDP quarters, but we had that and are now trying to change how we determine one becoming more and more subjective making it much harder to determine or come to a conclusion if one has occured or not. The Fed is trying to fight the inflation but it becomes harder for them when the manufacturing is contacting across the country. If it was expanding it would make it easier for the fed but he says that one thing that would make it an easier fight would be an "increase in the supply of goods" but all of the manufacturing numbers are going down so its making it much harder.
https://schiffgold.com/peters-podcast/peter-schiff-more-economic-data-confirms-a-recession/
What should consumers do if we are heading towards or are in a recession to diminish the effects of recession?
ReplyDeleteIf matters get worse for the manufacturing industry do you think the government could get involved by putting some kind of policy in place to encourage increased manufacturing production? I don't know if this would lead to high inflation but I feel like it could save the manufacturing industry costs and maybe prices would not be as high.
ReplyDeleteI wonder if some the causes of the drop in manufacturing are due global supply chain issues and the war in Ukraine. Two negative quarters are very concerning, but hopefully Q3 estimates remain positive.
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ReplyDeleteOur economy has not seen an event similar to the Covid-19 pandemic since the Spanish flu; therefore I believe it is very difficult for economists to predict the bounce back of the U.S. economy. I understand that economists have always measured a recession as two negative quarters, but given the circumstances, I think it is hard to say the economy is in a recession simply because we have no data to compare the long lasting effects of the pandemic too.
ReplyDeleteIt was not expected for Q3 to yield positive growth in GDP after experiencing two negative quarters consecutively. I think deciding we are in a recession based on the two declining GDP quarters is unrepresentative of the entire state of the economy and inaccurate. There could be other important factors outside of GDP indicative of a recession that are ignored.
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