NEW YORK (AP) — Most business economists think the U.S. economy could avoid a recession next year, even if the job market ends up weakening under the weight of high interest rates, according to a survey released Monday.
Only 24% of economists surveyed by the National Association for Business Economics said they see a recession in 2024 as more likely than not. The 38 surveyed economists come from such organizations as Morgan Stanley, the University of Arkansas and Nationwide.
Such predictions imply the belief that the Federal Reserve can pull off the delicate balancing act of slowing the economy just enough through high interest rates to get inflation under control, without snuffing out its growth completely.
…
High rates work to slow inflation by making borrowing more expensive and hurting prices for stocks and other investments. The combination typically slows spending and starves inflation of its fuel. So far, the job market has remained remarkably solid despite high interest rates, and the unemployment rate sat at a low 3.9% in October.
Does this mean rent will get easier to pay, or am I still boned?
Well, according to the article:
Of course, economists are only expecting price increases to slow, not to reverse, which is what it would take for prices for groceries, haircuts and other things to return to where they were before inflation took off during 2021.
Well, fuck.
And of course wages aren’t going to take a leap forward either.
Wages are growing on average, and faster than inflation (5.2% wage growth vs 3.2% inflation year over year for the past year). Takes two seconds to Google.
https://www.statista.com/statistics/1351276/wage-growth-vs-inflation-us/
Somewhat remarkably considering the problems with income inequality in the US, wages are growing the fastest of all among people with lower incomes (though all the wage increases in the world aren’t gonna tackle the problem of the power of the 0.1% investor class of wealth hoarders).
https://www.epi.org/publication/swa-wages-2022/
https://www.marketplace.org/2023/03/08/lower-income-earners-wages-have-grown-faster-than-others/
It’s pretty expected to given the persistent low unemployment and a high labor demand.
Not saying there’s no concerns at all in the entire economy or anything crazy. But you don’t have to spread disinformation like wages aren’t growing.
Can’t wait to be told “actually sweetie Biden fixed inflation” even though nothing actually got better. It just stopped getting worse as fast.
How would you describe ‘fixed’ inflation?
Price decreases would be deflation, but fixing inflation is literally something like stopping/slowing the rate of increase.
Normal people only really care about their own purchasing power. We care about our wages relative to the price of necessities and luxuries. Until paychecks go as far as they used to before the pandemic, normal people won’t consider the problem fixed.
Real wages, wages controlled for inflation, expressed in 1982-1984 dollars, on average have surpassed where they were before the pandemic.
Real wages in October 2023: https://www.bls.gov/news.release/pdf/realer.pdf
Real wages in December 2019: https://stats.bls.gov/news.release/archives/realer_01142020.pdf
In December 2019 it was $10.96 /hr expressed in 1982-1984 dollars. In October 2023 it was $11.05 /hr in 1982-1984 dollars.
So yes, purchasing power restored. Of course this is an average. So while most people have had their purchasing power restored, if someone is in a industry like tech that got hit hard by interest rates, they may not have experienced this. The wage gains have also been more pronounced for people with lower incomes than with higher incomes. So people with higher incomes are less likely to have seen their full purchasing power restored.
But hey our economy was nowhere near perfect in 2019 before the pandemic either. Let’s make it better by shifting focus to income inequality, reversing disastrous tax cuts made by Trump, improving our housing supply shortages, trying to find ways to effectively get the investor class to pay their fair share, etc etc. Biden’s increase of the corporate tax rate and creation of an internationally enforced corporate minimum tax to prevent tax dodging, and increased resources to the IRS to go after wealthy tax cheats are good starts, but there’s so much more to do. This inflation issue that has largely resolved now is just sucking all the air out of the room and distracting from all these other problems, many of which need local or state solutions.
Yes, that’s what fixing inflation means. I would like to know what you envision Biden doing. Decree that prices will go down? Not going to happen because there’s no mechanism for that kind of fiat.
Normal people don’t care about technical financial instruments. We care about how far our paychecks go, and they do not go as far as they did before the pandemic. Until they do, no one is going to believe inflation has been fixed. Get it?
I’m baffled that you’re getting downvotes – like… yeah. It’s a no brainer that people primarily care about their own purchasing power, and the last few years have depressed that to a shocking degree. Not one person on Earth looks at their inability to pay for groceries or rent and goes, “Well, thank God the markets are okay!”
As for what can be done? Price controls exist. Subsidies exist. The trouble with the modern world is, the wrong prices are controlled, and the wrong products are subsidized – that stuff is all tipped in favor of pouring money into the gullets of the already wealthy and powerful. And that’s a problem that could, in theory, be fixed if anyone at any level of any government gave the slightest shit about the people they serve.
Raise taxes on the wealthy. Pass rules that a certain minimum must be paid each year regardless of how many credits or deductions they have. Ban zoning. Build as many houses as can be built as fast as possible.
More fundamentally, I think there are a lot of countries that could benefit from taking a good long look at themselves and asking –
- Why does this nation exist?
- Whose needs matter most?
- To what end are our nation’s resources directed?
- What are our our priorities?
Because I think a lot of countries have just straight-up lost the plot. They’ve lost sight of, and fail to articulate, their purpose for existing, and thus squander phenomenal resources on bullshit. They live in myths and fantasies and old cultural scripts that haven’t been relevant or functional since the mid-70s.
I think honest answers to those questions would kind of horrify people – at least, they should horrify American citizens – and it might spark an actual change of direction.
The reason they’re getting down votes is because they’re making claims about purchasing power being depressed despite no data to back it up, with data from many angles showing purchasing power has been largely restored in comparison to before the pandemic, at least in the United States I should be clear. Many western countries had worse inflation than the US and have not had their purchasing power catch up again. Then it goes to “well we don’t trust the numbers we feel differently.” And how can you argue with feelings? It’s just not a productive discussion. Not to mention distracting from many other important issues in our economy. It’s not like there was a perfect economy in 2019. And it still isn’t, even with inflation slowed and wage increases largely compensating.
No facts, just vibes!
Lording economic theory over people won’t make them feel any different about their reality.
I completely agree, but if people are talking about specific elements of economic theory, then we should accurately talk about it. If we don’t hold ourselves to some kind of intellectual standard, then words become meaningless and incredibly easy to twist into fitting whatever agenda you like. A Republican could easily say that inflation has been caused by oppressive taxes and the obvious solution is to slash taxes, mostly for the wealthy of course, but with a mild tax break for the middle class to make it politically palatable. If you know anything about how inflation actually works, you’d know that this would simply make inflation even worse as consumers suddenly have a bunch of new cash to spend, further devaluing the dollar.
The fact is that paychecks do not go as far as they did before. That’s not a vibe, that’s the difference between making or missing bills.
You’re ignoring the facts that matter to score gotcha points. This is only going to piss people off even more than they already are lol
When discussing actual economic phenomena like inflation and recessions, yes, I think it is reasonable to actually be accurate and consistent in what we’re talking about.
Inflation is one problem. Wages not matching the cost of living is another, though related, problem. Saying that inflation has largely returned to normal is true, regardless of whatever else might also be true. Someone saying that is not saying that all economic woes have been fixed and that no one has any right to complain about anything.
I’m guessing you’re implying that Biden is saying that consumers need to stop whining because inflation has normalized. That would be pretty annoying, but he’s not actually said that. In fact, he just recently gave a speech blaming corporations:
Any corporation that has not brought their prices back down, even as inflation has come down, even as the supply chains have been rebuilt, it’s time to stop the price gouging.
https://www.cnbc.com/2023/11/27/white-house-supply-chain-bidenomics-wins.html
He’s also launched several initiatives aiming to make supply chains more robust and thus prevent future shocks from impacting prices so severely.
Still boned and if you’re not delighted it means you want Trump to win.
Can you explain how/why you think either Biden or Trump is related to the cost of rent? Just trying to understand your comment
Any dissatisfaction with anything in the US means you want Trump to win.
Rent and housing are under a supply crunch, unless the population stops growing, or construction speed doubles, nothing is going to drop prices.
I mean, legislation could easily drop prices. Our government reigning in unjustified price hikes would absolutely stop the unjustified price hikes.
It should be clearly stated that recession is a technical term with a specific meaning, not a general term for a rough economy. Not all tough economic times are recessions. It is not at all a contradiction for lots of people to be struggling and for a recession to not be happening. This is not economists saying that everything is hunky dory and that people have no reason to complain, only that the specific phenomenon that is a recession is not occurring right now.
Edit: Just to put it explicitly, a recession is generally defined as two or more successive quarters in which GDP contracts rather than growing.
I am unemployed and have been for many months. I have never had issues finding a job, but finding one lately has been impossible. I know of 3 others in the same boat as I. I think that a recession is inevitable at this point. Lucky for me, I have other sources of income. I did have to drastically cut back spending, however.
There is definitely something going on lately. I’m always looking for better jobs on indeed, professional recruiting services etc, trying to improve my situation.
In the last 4 months its been seemingly impossible to even get a response, and I know I’m more than qualified for these positions I’m applying to, and I’ve never had an issue before, even during severe economic downturns.
This is a nightmare scenario for me. What are the other sources of income, if you don’t mind me asking?
Website advertising and subscription revenue for websites I have owned for years. Spouse income as well.
Here’s my gripe with economists. Even if this wasn’t true, wouldn’t be in the best interest of the economy to lie about it so the market doesn’t get spooked and end up doing things that would make inflation worse?
What other ‘science’ has that nifty feature in it?
Regular medical science, it is called the placebo effect. It only works a bit. Not like you are going to regrow a limb, more like if you had a 40% of getting better on your own you now have a 50%.
Truth is economists can’t predict shit and recessions happen based on numbers not based on feelings. We can’t click our heels together and wish our way to a better world.
My initial thoughts exactly.
You can make money on the economy going up or down, so there’s generally economists predicting both. There’s also a lot of economists that love to be the one to predict a recession, so they pretty much always predict one.
Every economists was predicting recession a few months back. They have an accuracy rate less than horoscopes
Tbf, the act of predicting a recession can change the outcome, since the economy is just people reacting to things with money.
If everyone is expecting their houses to fall down from thin walls, so they start adding panels to their walls, suddenly the newly sturdy walls arent falling down anymore.
Right except people aren’t lemmings. Just because I hear some talking head say how he thinks there will be a recession in a month doesn’t mean I cut all spending.
An individual is not a lemming, no. But people? People are scared, stupid, lemmings who will follow the crowd, almost every time.
We’re social creatures, designed to work in groups. The downside (or upside I guess) is that people do follow the crowd.
… What? Did you click on the wrong comment?
Any witches I can follow on Mastodon who provide stock analysis???
This isn’t even remotely true, why is it being upvoted?
Wow we went through nearly 3 years of recession start tomorrow and now it’s not even going to happen. Even weather reporters are better.
Plenty of economists have been saying that avoiding a significant recession has been entirely possible. A recession is generally defined by at least two successive quarters of GDP decline, and while this did technically happen in 2022, the second quarter was only -0.6%, and the following quarter was back up to +2.7%.
It really needs to be stressed that not all bad economic circumstances are recessions. That’s a very specific thing.
Recession doesn’t have a hard definition. At best economists only admit to recessions when they are already in progress.
There’s some amount of fuzziness, yes, and as I said, most economists wouldn’t call that 2022 dip a meaningful recession, but regardless, a recession is absolutely, by definition, a contraction in GDP. That has not been happening. GDP growth has been above +2% for the last five quarter, and in Q3 of this year, it was +5%.
There is no economist alive that will tell you that five quarters of GDP growth is a recession, because words have meanings.
Edit: And before you ask, yes, even adjusting for inflation, it’s been five quarters of GDP growth. This doesn’t imply that there are no economic problems happening, but a recession is not one of them. Not all bad weather is a tornado.
I don’t necessarily disagree with your overall point, but GDP is just a measure commonly used to designate an economic recession. Downward movement in GDP is not the definition of a recession, though it’s a reliably used indicator. There’s a reason the US uses a voting body of economists to say there’s a recession rather than an algorithm linked to GDP numbers.
I don’t know why we let the economists define our terms. Be like doctors redefining illness to only being one disease and announcing that they cured all illnesses
No, that would be like people re-defining all sickness to be a cold, and then getting annoyed when their doctors tell them that Chlamydia is not, in fact, a cold and won’t be cured by time and Tylenol.
No I had it right the first time, but thanks for your “help”. I know what YOU economists did and don’t need you to explain your version of events.
TIL I am an economist
Sorry about economist apologist. Better?
… No, you fucked it up both times
If you think professionals defining the terms of their profession is outrageous, graduating high school is gonna drop a brick on your head
Nope.
Lol, aight bud, you keep going on thinking you invent definitions of words used by people in jobs you dont work
That will get you as far as a fly pisses, but dont let that stop ya
Weather doesnt read the weather report and change itself in response.
People read economics reports and spend differently in response.
Start giving the northern wind a newspaper, and you will see the weather report falter.
Just in time for a tumultuous election
The poor and middle class are sowing, the rich are reaping
"After a historic run-up in inflation, Americans are now starting to see something they haven’t in three years: deflation,” the Wall Street Journal reports.
“To be sure, deflation—that is, falling prices—is largely confined to appliances, furniture, used cars and other goods. Economywide deflation, when prices of most goods and services continuously fall, isn’t in the cards.”
“But economists say goods prices likely have further to fall, which will ease inflation’s return to the Federal Reserve’s 2% target, perhaps as early as the second half of next year.”
alls that matters is housing, food, and energy.
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Yeah, that crafty Biden pulled the inflation lever in the Oval Office. It’s right next to the gas prices lever.
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They also do not control inflation so that it goes down in election years. The economy is nowhere near that simple.
Not to mention that the majority party in the house has done nothing but fight with each other and try to impeach Biden.
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Okay? What’s your point? Biden and congress still don’t control inflation.
