Fed, Economists Make Course Correction on U.S. Recession Predictions
The first two quarters of 2022 had seen U.S. economic output contract at a 1.6%
The first two quarters of 2022 had seen U.S. economic output contract at a 1.6% annual rate from January through March and at a 0.6% annual rate from April through June, and by one common, though not technically accurate, definition the country had already entered a downturn.
The U.S. unemployment rate at 3.5% in July is actually lower than the point where many analysts expected it to begin rising, consumers continue to spend.
Reuters polls of economists over the past year showed the risk of a recession one year out rising from 25% in April 2022, the month after the first rate hike of the Fed's current tightening cycle, to 65% in October. The most recent read: 55%.
The recession revisionists include the Fed's own staff, who followed their models to steadily downgrade the outlook for the U.S., moving from increased concerns about "downside risk" as of last fall, to citing recession as a "plausible" outcome as of last December, and then projecting as of the Fed's March 2023 meeting that recession would begin this year.
The United States government will run a deficit of around $2 trillion, double last year's number, for the fiscal year that ends in just over three weeks.
U.S. consumer spending increased by the most in six months in July as Americans bought more goods and services
Since the completion of the acquisition of Credit Suisse by Switzerland's largest bank, UBS (UBS) has posted a profit of $28.88 billion in Q2 2023.