Over half of U.S. small business owners believe the economy is already in a recession, though their own financial conditions remain strong and they have less concerns about the health of their banks, according to a survey by the National Federation of Independent Business.
Despite initial predictions of a recession, the U.S. economy has experienced unexpected growth, with high consumer spending and continued borrowing and investment by businesses being key factors.
U.S. economic growth may be accelerating in the second half of 2023, defying earlier recession forecasts and leading to a repricing of long-term inflation and interest rate assumptions.
Despite optimistic economic data and the belief that a recession has been avoided, some economists and analysts believe that a recession is still on the horizon due to factors such as the impact of interest rate hikes and lagged effects of inflation and tighter lending standards.
Recent profit reports from companies such as Amazon, Walmart, and Home Depot, along with other consumer statistics, indicate that the case for a 2023 recession is weakening, as the consumer economy shows resilience with rising real incomes, substantial savings, and continued spending in sectors like automobiles and services.
Despite the optimism from some economists and Wall Street experts, economist Oren Klachkin believes that elevated interest rates, restrictive Federal Reserve policy, and tight lending standards will lead to a mild recession in late 2023 due to decreased consumer spending and slow hiring, although he acknowledges that the definition of a recession may not be met due to some industries thriving while others struggle.
The Bank of Canada may shift its focus from the output gap to labor market indicators, such as unemployment and wages, in order to make inflation forecasts and guide its interest rate decisions, according to a report by CIBC economists. The report suggests that the labor market has become a more reliable indicator of excess demand or supply, and forecasts that if the job market outlook suggests it's not necessary, there may be no more rate hikes this year and rate cuts in early 2024.
A global recession is looming due to rising interest rates and the cost of living crisis, leading economists to warn of a severe downturn in the post-Covid rebound.
The US economy is expected to slow in the coming months due to the Federal Reserve's efforts to combat inflation, which could lead to softer consumer spending and a decrease in stock market returns. Additionally, the resumption of student loan payments in October and the American consumer's credit card addiction pose further uncertainties for the economy. Meanwhile, Germany's economy is facing a contraction and a prolonged recession, which is a stark contrast to its past economic outperformance.
Canada's second-quarter GDP report is expected to show a significant slowdown in economic growth, potentially leading to a pause in interest rate hikes by the Bank of Canada despite recent high inflation data.
Canadian real estate and the economy are facing challenges, with slowing growth, high debt for millennials, increased fixed-rate mortgages, rising housing prices as an inflation risk, and low mortgage growth prompting concerns.
Canada's upcoming gross domestic product (GDP) reading is expected to be closely watched by the Bank of Canada (BoC) ahead of its September interest rate decision, with economists predicting a slowdown in the second quarter that could lead to a pause in interest rate hikes despite higher-than-expected inflation. The impact of recent wildfires and a dock workers strike is also expected to affect the data.
The second quarter of 2023 saw a consistent rise in borrowing among Canadians, with subprime borrowers experiencing the highest increase in credit balances due to higher spending habits and elevated interest rates on variable-rate loans. Demand for new credit also grew significantly, leading to a total Canadian household debt of $2.3 trillion.
Canada is facing a deep crisis due to a housing crisis, rising consumer debt, and high interest rates, which are causing unaffordability and financial vulnerability for working people, while the government's plan to address these challenges remains unclear.
Canada's economy unexpectedly contracted in the second quarter, raising concerns of a possible recession, as declines in housing investment and slower exports and household spending impacted growth. This is likely to lead the central bank to hold interest rates steady.
The U.S. economy has shown unexpected strength, with a resilient labor market and cooling inflation improving the odds of avoiding a recession and achieving a soft landing, but the full effects of rising interest rates may take time to filter through the economy.
Australia's economy is experiencing a per capita recession, with a drop in GDP per capita for the second consecutive quarter, driven by weak household spending and reliance on government spending and population growth.
The US economy is predicted to enter a recession by spring, leading to a 25% or more crash in the S&P 500, according to economist David Rosenberg, who warns that American consumers are nearing their spending limits and rising home prices reflect a weak housing market.
Canada added 40,000 jobs in August, surpassing economists' expectations, while the unemployment rate remained steady at 5.5%. This positive job growth suggests that the economy is not completely stalled, but the Bank of Canada is not expected to raise interest rates in the near future.
Canadian consumer and business confidence has plummeted to its lowest levels since the pandemic, leading to a disconnect between the state of the economy and the public's negative sentiment, which could be attributed to anxiety-inducing inflation and concerns about rising interest rates as well as worsening structural problems such as unaffordable home prices and stagnant GDP per capita.
The US consumer is predicted to experience a decline in personal consumption in early 2024, which could lead to a potential recession and downside for stocks, as high borrowing costs and dwindling Covid-era savings impact household budgets.
There are indications that a severe economic contraction may be approaching in the US, with a significant decline in home sales and rising interest rates, similar to the 2008 financial crisis, according to Bloomberg analyst Mike McGlone.
Canada's economy is struggling and heading towards a recession, with declining incomes and high household debt, leading to growing dissatisfaction with Prime Minister Trudeau and his government.
The odds of the U.S. entering a recession by mid-2024 have decreased, but certain regions, such as the West and South, are still more vulnerable due to rapid economic growth, high home prices, and inflation, according to Moody's Analytics. However, a severe downturn is unlikely, and the Midwest and Northeast are less susceptible to a pullback. Overall, the chance of a recession has declined nationwide, but there is still a risk for some metro areas, such as Austin, Boise, Ogden, and Tampa.
Canada's economic growth strategy is failing and needs to be reevaluated, as the country's GDP per capita growth is among the weakest in OECD countries and real incomes are lower than before the pandemic, with projections suggesting that it will not recover until at least 2027, according to policy advisers. The government's core policy beliefs, including freewheeling government spending, reliance on government programs to drive innovation, and excessive immigration, are misguided and contribute to a low-productivity, low-wage economy. A policy agenda focused on raising average living standards through fiscal and monetary policy restraint, productivity-focused measures, and tax and regulatory reforms is needed.
Entrepreneur Jaspreet Singh warns that signs of a potential recession in America include labor shortages, inflation-driven spending, and high interest rates, with economists predicting that the country may start feeling the effects of a recession by the second quarter of 2024. Singh advises Americans to educate themselves about saving money and investing to prepare for the possible downturn.
The era of infrequent recessions may be coming to an end, as economists predict that boom-and-bust cycles will become the norm again due to growing national debts and inflationary pressures.
The Federal Reserve has paused raising interest rates and projects that the US will not experience a recession until at least 2027, citing improvement in the economy and a "very smooth landing," though there are still potential risks such as surging oil prices, an auto worker strike, and the threat of a government shutdown.
The forecasted U.S. recession in 2024 is expected to be shorter and less severe than previous recessions, with the economy's interest-rate sensitivity much lower due to reduced leverage and elevated savings from the postpandemic environment, leading investors to consider positioning for investment opportunities that will drive markets into 2024.
The US economy has triggered the fourth and final signal for a potential recession, and historical data suggests that recessions will become more frequent in the future due to government interventions and other factors such as inflation, tightening monetary policy, oil price spikes, and tight government budgets.
Deutsche Bank's economists are still predicting a US recession despite the ongoing resilience of the economy, pointing to rapidly rising interest rates, surging inflation, an inverted yield curve, and oil price shocks as the four key triggers that historically have caused recessions and are currently happening.
The summer's positive economic indicators, such as lower inflation and strong job numbers, have led to optimism that the US will avoid a recession, but factors such as a potential auto strike, the resumption of student-loan repayments, and a government shutdown could contribute to a downturn. The combined impact of these factors, along with others like higher interest rates and oil prices, suggests that a recession may be looming.
Investors and experts differ on the timing, but many believe a recession is inevitable in the near future due to falling consumer confidence and a slowing economy, prompting discussions about the Federal Reserve's interest rate moves.
The likelihood of the US avoiding a recession has decreased, as two factors, including a surge in interest rates and the potential for resurgent inflation, could push the economy into a downturn, says economist Mohamed El-Erian.
A new report warns that a recession may be imminent as employment, business optimism, and output continue to decline, with companies struggling to maintain staffing numbers and cope with higher borrowing costs and weaker customer demand.
The chances of the U.S. economy avoiding a recession are improving, with recession odds dropping to 46 percent, the lowest since the first quarter of 2022, according to economists surveyed by Bankrate. However, risks of a recession remain, with more than 2 in 5 economists suggesting that the chances are still greater than 50 percent.
The National Bank of Canada reports that Canada's housing deficit reached an all-time low in the third quarter, with soaring housing costs and supply constraints expected to further increase mortgage lending costs and rents.
The Canadian parliamentary budget officer predicts that higher interest rates will impede economic growth in the second half of the year and result in a significant increase in the federal deficit, with consumer spending expected to remain weak until mid-2024.
Bank of Canada Governor Tiff Macklem states that the economy is not heading for a serious recession and is looking for signs of easing inflation ahead of a rate decision on October 25th.
Economists are predicting that the U.S. economy is less likely to experience a recession in the next year, with the likelihood dropping below 50% for the first time since last year, thanks to factors such as falling inflation, the Federal Reserve halting interest rate hikes, and a strong labor market.
Despite high interest rates and sluggish GDP growth, analysts predict that the UK will avoid a recession due to a likely end to rate increases, falling inflation, and a return to real pay growth.
Mortgage rates are expected to decrease significantly by the end of 2024, but a shortage of available homes will lead to higher sales prices for the next few years. Despite the drop in rates, the low inventory of new homes will drive up purchase costs. Additionally, a sluggish economy, rising unemployment, and declining inflation may lead to a recession in early 2024. However, the combination of these factors will eventually help bring down mortgage rates further in the following years.
Economists have raised their US growth projections and reduced recession odds to a one-year low due to strong consumer spending supported by a still-robust labor market, despite high borrowing costs and inflation.
Despite predictions of a soft landing for the U.S. economy, many Americans are still preparing for a recession by monitoring spending, limiting discretionary purchases, and considering long-term savings investments, according to surveys. Additionally, some homebuyers are hopeful that a recession will lead to lower home prices and mortgage rates, making it a more opportune time to buy. However, the lack of housing inventory remains a challenge for buyers, with over 60% reporting difficulty in finding suitable homes within their budget range.
