WASHINGTON — The U.S. Most of the country’s business economists now think that the United States will go into a recession later this year than they had thought before. This is because a series of reports have shown that the economy is holding up surprisingly well, even though interest rates are steadily going up.
Fifty-eight percent of 48 economists polled by the National Association for Business Economics expect a recession this year, the same proportion as in the NABE’s December survey. However, only a quarter believe a recession will have begun by the end of March, which is half the proportion who believed so in December.
The findings were released on Monday, based on a survey of economists from businesses, trade associations, and academia.
A third of the economists polled expect a recession to begin in the April-June quarter recession. One-fifth believe it will begin in the July-September period.
The delay in when economists think a recession will start is due to a series of government reports that show the economy is still strong, even though the Federal Reserve has raised interest rates eight times to slow growth and lower high inflation.
A third of the economists polled expect a recession to begin in the April-June quarter.
Employers added more than 500,000 jobs in January, and the unemployment rate fell to 3.4%, the lowest level since 1969.
In addition, retail and restaurant sales increased by 3% in January, the largest monthly increase in nearly two years. This indicated that consumers, who drive most of the economy’s growth, remain financially healthy and willing to spend.
At the same time, several government releases revealed that the inflation recession rebounded in January after falling for several months, fueling speculation that the Fed will raise its benchmark rate even higher than previously anticipated. When the Fed raises its key rate, mortgages, auto loans, and credit card borrowing become more expensive. Business loan interest rates are also rising.
Tighter credit conditions can weaken the economy and even lead to a recession. According to new economic research released on Friday, the Fed has only managed to reduce inflation from recent highs by causing a recession.
SOURCE – (AP)
