10/7/2013 6:45 PM ET|
When will the next US recession hit?
Economists are already working on this question, and the answer is: sooner than you think. And that assumes the US avoids defaulting on its debt repayments.
The United States economy may have been one of the first in the world to have escaped the last recession, but economists are already trying to work out when the next one will hit -- and the answer is: probably sooner than you think.
The overwhelming majority of mainstream economists predicts that the world's biggest economy should have at least another two years before it runs into six months of negative growth (the official definition of recession). After 2015, however, the date for the next recession could fall any time between the end of 2015 and 2018, according to economists' forecasts.
These predictions are based on the assumption that the U.S. manages to avoid the possibility of defaulting on its debt repayments for the first time in its history -- the prospect of which looms nearer every day as the government shutdown continues.
The U.S. Treasury warned last week that a default could cause a "catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth."
If default is avoided -- and markets seem fairly calm about the prospect -- then the U.S. is still on track for a recession in 2016, with a 50 percent chance of recession then, according to a note published Monday from Charles Robertson, global chief economist at Renaissance Capital, the Russia-focused bank.
The U.S. economy last suffered a recession between the end of 2007 and June 2009, a downturn sparked by the global financial crisis.
"Ben Bernanke may be a remarkable man, but we are asking a bit much to assume he has abolished the business cycle and created the nirvana of never-ending growth," Robertson added.
Bernanke, in his capacity as Chairman of the U.S. Federal Reserve, has led an asset purchasing program which has kept U.S. borrowing costs relatively low by buying up government bonds. This has been credited with making the slowdown in growth less severe than it could have been.
However, consumer spending, usually a big driver of growth in the U.S., has not picked up in the way many economists forecast. In September, banks including JP Morgan (JPM) and Barclays (BCS) downgraded their forecasts for U.S. gross domestic product growth in the third quarter, after a worse-than-expected retail sales rise of 0.2 percent in August.
American consumers are facing inflation in the cost of services like medical care, and less job security. In August, consumer prices rose by 1.5 percent annually.
Historical data show a recession in the U.S. on average every 6-7 years since 1947, and double-dips within eight years of bigger downturns like the Great Depression.
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What needs to be calculated and reported is the percent of able bodied adults that want - and need - to be full time employed. That number has been crashing, particularly among 18 - 30 year old adults. They are dramatically unemployed or underemployed, and are not showing up in the numbers reported by the LIARS that are trying to get everyone to believe that everything is just puppies and rainbows.....
I agree!!!! What recession? We have been in a depression for years.....We are not stupid.....Everyone tries to downplay or situation but we are in a depression!!!!!!!!!!!!!!!!!!!
"When will the next US recession hit?"
Uh--h-h-h-h......MSN is trying to be funny. Right?
Remember that quote, when our now president said on the campaign trail, “We are going to fundamentally change America.” When every word he uttered was greeted with shouts and cheers from the crowds who treated him like a rock star? Well, I wonder if his fans are still ready to cheer him on today and if so, why?
When he said fundamentally change America, did anyone have an idea of how radical that change was going to be? If not, you should have been. Your next clue should have been when he state, “We will change America, we will change the world” Arrogance? Maybe, but also someone with an agenda that does not include keeping America the way we know it. Or how about when he said, “We are not a Christian nation.” Did any of these statements not bother the American people and if it they did not, why?
Unfortunately, we seem to be dealing with a President who loves to hear himself speak and everytime he does so, we lose a little bit more of what makes this country great, freedom. Freedom to make choices, freedom to be the best that we can be and believe me, if he has his way, we won’t be the best country in the world, we will be just another failed, socialist driven country. So, I ask, why is it so hard for America to not see what is happening? If this president gets his way, capitalism will be a thing of the past. Hard work will be frowned upon and the unemployed will be taken care of by the government. Sound like paradise to anyone? If so, again, just look at any socialist country and see if you can find anyone proud of their country.
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