The probability of a recession in the US has reached 100%

probability that United State Recession in the next 12 months is for sureAccording to new expectations for models Bloomberg Economicsa blow to the president’s economic message Joe Biden ahead of the midterm elections in November.

Latest Probability Models Recession prepared by economists by Bloomberg A.Anna Wong and Elisa Winger Expect a higher probability of a recession across all time frames, with a 12-month estimate of a recession for October 2023 reaching 100%, up from 65% for the same period in the previous update.

The offer would be bad news for Biden. Who has repeatedly said that the United States will avoid a recession And that any slowdown would be “very slight”, as he tries to reassure Americans that the economy is on solid foundations under his administration.

Manufacturing activity contracts in New York for the third month in a row

however, Tightening financial conditionsContinuing inflation and expectations a Federal Reserve Going forward with raising interest rates increases the risks of deflation.

The model shows more certainty about a recession than other forecasts. A separate Bloomberg survey for 42 Economists predict that the probability of a recession In the next 12 months it is now 60%, up from 50% in the previous month.

The forecast contrasts sharply with Biden’s optimistic tone. The president focused on strong growth Labor in his campaign to help Democrats To maintain their majority in the House and Senate in elections that take place in three weeks.

Long-term inflation expectations in the United States are declining

But inflation, which was approaching its highest level in four decades, was a drag on expectations Democrats in the elections Polls indicate that the economy is the main concern of voters.

Uses the Bloomberg Model of Economics 13 macroeconomic indicators and financial forecasts to forecast the possibility of a recession in the one- to two-year horizons.

While the probability of a recession occurring within 12 months was 100% according to the model, the odds of it occurring As the recession increased before. The model predicts that the probability of a recession 11 months from now will be 73%, up from 30%, and the probability of 10 months has risen to 25% from 0%.

According to Bloomberg Economics, the decline of Forecasts are due to a general deterioration From the economic and financial indicators used in the model.

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