Signs US Could Be Heading for a Recession

(DailyDig.com) – Top US economists are concerned about a possible upcoming recession in the nation’s economy.

Danielle DiMartino Booth, a strategist from Quill Intelligence Research, believes the nation may already be in a recession. Despite the government’s claims that job growth is strong, the unemployment rate is steadily rising. The current jobless rate is 3.8 percent, as opposed to last year’s rate of 3.4 percent.

Booth claims that a recession occurs when the rate of unemployment exceeds the lowest point in the cycle for three months. Layoffs and lost employment have risen over the year ending in February, and she predicted that more will occur as earnings reports come out at the end of April.

A financial analyst, Gary Shilling, said that signs are indicating that a recession may exist within the next few months. One sign is that the Federal Reserve hasn’t shown any indication that they will be cutting credit rates soon.

Another indicator of a potential recession is that interest rates in the short term are higher than long-term rates. If investors foresee long-term rates declining, that is a reliable indication of a coming recession.

Shilling also claimed that the labor market is a reliable sign of the economy declining. A strong labor market will give resilience to the nation, but the loss of jobs and low increases in wages show a weak labor market.

The chief economist of Piper Sandler, Nancy Lazar, asserts that an interest rate that is high divides the nation, with some sectors prospering while others are hurt financially. Big businesses benefit when their income produces more from the high interest rates, their stocks surge, and their debt for purchases is at a low cost.

Customers, on the other hand, are suffering because their debt is increasing due to higher interest rates. In addition to accruing more debt with high interest rates, they also face inflation as their wage increases, if any, diminish.

Lazar predicts that there is about a 50 percent chance that the US will experience a recession.