Ryan Duckworth
Professor Skosples
Human Biology
October 19th 2023
Will the US economy find balance?
The US economy currently stands on a thin rope, where the slightest push could tip it towards a recession or guide it towards a soft landing. Bloomberg Economics model shows a message- the risks of recession in 2024 are more pronounced than those of a stable economic path.
While the model, known for its accuracy, suggests a better chance of a 2024 recession, it's important to remember that The Fed typically confirms a recession months after it has begun. However, the model hints at the possibility of a downturn in late 2023. While this prediction might not appear severe at slightly better than a 50% chance, the interpretation depends on one's economic perspective.
The signs of the past 18 months, including record-high inflation and a steady rise in interest rates, are bright spots. Consumers continue to spend demonstrating that a strong labor market and a delayed impact of higher interest rates due to the pre-pandemic cash reserves and fixed-rate mortgages provide some cushion.
In Conclusion, the US economy is totally up in the air of uncertainty. As we approach the pivotal months of 2023 and 2024, the US economy's journey unfolds, reminding us that the outcome remains uncertain. It's a thin rope, and we can only wait until the future.
Resource
https://www.businessinsider.com/us-economy-recession-prediction-model-2023-10
It is interesting Ryan that the state of our economy truly is uncertain and I believe what we have been learning in this class has been helping us understand the trends and what not of our economy though. I hope we are not in a recession but if we are it will affect us when we jump into the work force. I know that the mortgage and housing rates are crazy high and I hope they crash so we can afford to buy a home one day.
ReplyDeleteI do think some of the things we have been learning like employment rate and other models show the recession happening and so forth. Which is why I like this class although some of it is hard to fully wrap my brain around.
With the prediction of the Bloomberg model it is likely that businesses will begin to cut spending. The first place they could go would be laying off workers which would really push the recession into swing since consumers will no longer be spending. However due to the recent economic trends (high inflation, rise in interest rates, and high consumer spending) it does look like the recession will hold off a bit longer. It will be interesting to see how businesses react to this model since it is generally correct, and if they will begin cutting spending. Once they do this businesses are virtually guaranteeing there will be a recession.
ReplyDeleteRyan this was a great observation about the U.S economy. It will definitely be interesting seeing what happens in the following years, as we have seen before in 2007 the housing market rose and rose until it took a deep dive, causing a recession. Maybe that's where we are headed but no one can be truly sure until it happens
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