NEW YORK (AP) — Most business economists think the U.S. economy could avoid a recession next year, even if the job market ends up weakening under the weight of high interest rates, according to a survey released Monday.
Only 24% of economists surveyed by the National Association for Business Economics said they see a recession in 2024 as more likely than not. The 38 surveyed economists come from such organizations as Morgan Stanley, the University of Arkansas and Nationwide.
Such predictions imply the belief that the Federal Reserve can pull off the delicate balancing act of slowing the economy just enough through high interest rates to get inflation under control, without snuffing out its growth completely.
…
High rates work to slow inflation by making borrowing more expensive and hurting prices for stocks and other investments. The combination typically slows spending and starves inflation of its fuel. So far, the job market has remained remarkably solid despite high interest rates, and the unemployment rate sat at a low 3.9% in October.
Does this mean rent will get easier to pay, or am I still boned?
Well, according to the article:
Of course, economists are only expecting price increases to slow, not to reverse, which is what it would take for prices for groceries, haircuts and other things to return to where they were before inflation took off during 2021.
Well, fuck.
And of course wages aren’t going to take a leap forward either.
Wages are growing on average, and faster than inflation (5.2% wage growth vs 3.2% inflation year over year for the past year). Takes two seconds to Google.
https://www.statista.com/statistics/1351276/wage-growth-vs-inflation-us/
Somewhat remarkably considering the problems with income inequality in the US, wages are growing the fastest of all among people with lower incomes (though all the wage increases in the world aren’t gonna tackle the problem of the power of the 0.1% investor class of wealth hoarders).
https://www.epi.org/publication/swa-wages-2022/
https://www.marketplace.org/2023/03/08/lower-income-earners-wages-have-grown-faster-than-others/
It’s pretty expected to given the persistent low unemployment and a high labor demand.
Not saying there’s no concerns at all in the entire economy or anything crazy. But you don’t have to spread disinformation like wages aren’t growing.
Disinformation?
I’ll offer this in return:
As of the second quarter of 2023, prices are up 15.8% since the beginning of 2021, while wages have climbed 12.8%, based on the latest Bureau of Labor Statistics data.
The trend is a win for workers – a feature of a job market that’s been surprisingly resilient as inflation slows and interest rates rise.
Nonetheless, a gap between household buying power and inflation remains.
At its current pace, workers’ wages aren’t set to recover their loss of total purchasing power until at some point in the fourth quarter of 2024, according to Bankrate’s new Inflation To Wage Index.
https://www.spokesman.com/stories/2023/sep/13/wages-are-finally-rising-faster-than-inflation-wil/
So let’s say wages are increasing faster than inflation. A couple articles I looked at said they just started to last quarter, so great, you might be right, but you’ve only been right for a very short while and the buying power that should go along with increasing wages won’t be felt until next year sometime.
Not disinformation, it’s accurate. Your article is accurate too, though lacks context and important details. Let me explain.
Wages outpaced inflation at the beginning of the pandemic, stopped being enough to compensate about May 2021, and started to again in January 2023. Though technically even earlier, because these are all year over year rates so it’s talking about the entire year summed up ending in January 2023, so in reality that threshold was crossed sometime in the year ending in January 2023. As the graph above showed.
If you’re talking about real wages/hr compensated for inflation fully recovering, it depends on your comparison point in time. I think December 2019, just before the pandemic started, makes the most sense as a comparison point. If that’s your starting point, real wages/hr are already higher.
Real wages in 1982-1984 dollars, December 2019: $10.96/hr https://www.bls.gov/news.release/archives/realer_01142020.pdf
The same for October 2023: $11.05/hr https://www.bls.gov/news.release/pdf/realer.pdf
Your article doesn’t state what it uses as the start point date. I’m guessing to get at that conclusion they must have picked a date already somewhat into the pandemic. I think this is misleading because there was a time at the start of pandemic inflation plummeted as people stopped spending money on many things, while wages continued to increase. If you consider the pandemic as a whole, wages have compensated for inflation. Purchasing power right now is greater than in December 2019. If you cherry pick somewhere in the middle of the pandemic, grabbing the point in time that inflation really started to tick up with the supply chain crisis but excluding the earlier wage increases that occurred during the pandemic, like let’s say April 2021 (well over a year into the pandemic), than we would still be below that time point.
April 2021: $11.31/hr https://www.bls.gov/news.release/archives/realer_05122021.pdf
I’m guessing that’s the time point your article must have picked, because at the current rate of wage increases over inflation we’ll equal that again ~February. But again, misleading year over year rates, so if we hit that on the official number reported in February it means in reality we crossed that point sometime during the previous year ending in February.
And another disclaimer, these wage gains are not even across the whole economy. As your article pointed out, hourly workers and low wage workers saw more of the increases. Some sectors like healthcare and social services saw less of them. So none of this is to imply anything about any particular individual, these are all very broad averages. And of course feel free to disagree with me on what comparison time points make the most sense to you. But I think the most important things in terms of inflation are that month to month inflation is currently pretty flat and back to normal (0.1% price increase in November 2023 from October 2023), and wage increases are continuing to outpace it, so purchasing power will continue to improve over time if these trends continue.
Just fyi, when the poster accused you of disinformation, it was a warning that they were about to push some disinformation.
Can’t wait to be told “actually sweetie Biden fixed inflation” even though nothing actually got better. It just stopped getting worse as fast.
How would you describe ‘fixed’ inflation?
Price decreases would be deflation, but fixing inflation is literally something like stopping/slowing the rate of increase.
Normal people only really care about their own purchasing power. We care about our wages relative to the price of necessities and luxuries. Until paychecks go as far as they used to before the pandemic, normal people won’t consider the problem fixed.
Real wages, wages controlled for inflation, expressed in 1982-1984 dollars, on average have surpassed where they were before the pandemic.
Real wages in October 2023: https://www.bls.gov/news.release/pdf/realer.pdf
Real wages in December 2019: https://stats.bls.gov/news.release/archives/realer_01142020.pdf
In December 2019 it was $10.96 /hr expressed in 1982-1984 dollars. In October 2023 it was $11.05 /hr in 1982-1984 dollars.
So yes, purchasing power restored. Of course this is an average. So while most people have had their purchasing power restored, if someone is in a industry like tech that got hit hard by interest rates, they may not have experienced this. The wage gains have also been more pronounced for people with lower incomes than with higher incomes. So people with higher incomes are less likely to have seen their full purchasing power restored.
But hey our economy was nowhere near perfect in 2019 before the pandemic either. Let’s make it better by shifting focus to income inequality, reversing disastrous tax cuts made by Trump, improving our housing supply shortages, trying to find ways to effectively get the investor class to pay their fair share, etc etc. Biden’s increase of the corporate tax rate and creation of an internationally enforced corporate minimum tax to prevent tax dodging, and increased resources to the IRS to go after wealthy tax cheats are good starts, but there’s so much more to do. This inflation issue that has largely resolved now is just sucking all the air out of the room and distracting from all these other problems, many of which need local or state solutions.
Yes, that’s what fixing inflation means. I would like to know what you envision Biden doing. Decree that prices will go down? Not going to happen because there’s no mechanism for that kind of fiat.
Normal people don’t care about technical financial instruments. We care about how far our paychecks go, and they do not go as far as they did before the pandemic. Until they do, no one is going to believe inflation has been fixed. Get it?
No facts, just vibes!
The fact is that paychecks do not go as far as they did before. That’s not a vibe, that’s the difference between making or missing bills.
You’re ignoring the facts that matter to score gotcha points. This is only going to piss people off even more than they already are lol
When discussing actual economic phenomena like inflation and recessions, yes, I think it is reasonable to actually be accurate and consistent in what we’re talking about.
Inflation is one problem. Wages not matching the cost of living is another, though related, problem. Saying that inflation has largely returned to normal is true, regardless of whatever else might also be true. Someone saying that is not saying that all economic woes have been fixed and that no one has any right to complain about anything.
I’m guessing you’re implying that Biden is saying that consumers need to stop whining because inflation has normalized. That would be pretty annoying, but he’s not actually said that. In fact, he just recently gave a speech blaming corporations:
Any corporation that has not brought their prices back down, even as inflation has come down, even as the supply chains have been rebuilt, it’s time to stop the price gouging.
https://www.cnbc.com/2023/11/27/white-house-supply-chain-bidenomics-wins.html
He’s also launched several initiatives aiming to make supply chains more robust and thus prevent future shocks from impacting prices so severely.
Still boned and if you’re not delighted it means you want Trump to win.
Can you explain how/why you think either Biden or Trump is related to the cost of rent? Just trying to understand your comment
Any dissatisfaction with anything in the US means you want Trump to win.
It should be clearly stated that recession is a technical term with a specific meaning, not a general term for a rough economy. Not all tough economic times are recessions. It is not at all a contradiction for lots of people to be struggling and for a recession to not be happening. This is not economists saying that everything is hunky dory and that people have no reason to complain, only that the specific phenomenon that is a recession is not occurring right now.
Edit: Just to put it explicitly, a recession is generally defined as two or more successive quarters in which GDP contracts rather than growing.
Every economists was predicting recession a few months back. They have an accuracy rate less than horoscopes
Tbf, the act of predicting a recession can change the outcome, since the economy is just people reacting to things with money.
If everyone is expecting their houses to fall down from thin walls, so they start adding panels to their walls, suddenly the newly sturdy walls arent falling down anymore.
Right except people aren’t lemmings. Just because I hear some talking head say how he thinks there will be a recession in a month doesn’t mean I cut all spending.
… What? Did you click on the wrong comment?
No.
You wanna try your comment again, then, and make it relevant to the comment youre clicking on?
Or was the comment being gibberish intentional?
I don’t see what is confusing. You made the claim that the act of predicting a recession can cause a recession and stated a mechanism. I pointed out that predictions of recessions are rarely accurate and the mechanism doesnt work the way you described.
Yeah, see, this is why I think you clicked on the wrong comment.
I said that an economy is a result of humans acting, and that the act of stating a recession is coming is enough to change peoples actions to either cause or prevent a recession.
You then launched into some unrelated nonsense about being lemmings.
Do you need help finding the comment you meant to respond to?
An individual is not a lemming, no. But people? People are scared, stupid, lemmings who will follow the crowd, almost every time.
We’re social creatures, designed to work in groups. The downside (or upside I guess) is that people do follow the crowd.
If people followed the crowd vaccination rates would be 100%. Remind me again what they really are. People, real freaken people, make bad decisions, they don’t listen to experts, they expert shop, they go against the grain, they go against what they are told they should do. They are brave, cowardly, stupid, smart, ruthless, and nice.
This is why economist is bull crap. They build these models assuming the very worst about humanity and demand we all act that way. So of course if your base assumption is that humans blindly trust anyone who calls themselves an expert and can only think short term they would sell everything if they hear a whisper of recession.
I look at the numbers for investing not what some moron on TV shooting stuff has to say.
https://youtu.be/gUkbdjetlY8?si=zaw0AV3QvbN6PXYv
Remember this? Nah bet you don’t.
This isn’t even remotely true, why is it being upvoted?
Maybe because it is true and no one wants to hear government economists bullshit about how everything is fine when everything is not fucking fine.
So sick of economist lying crap. Telling us we can’t have universal healthcare and we can’t get rid of student loan debt but we have to give free money to banks and trade with countries that have slavery.
But it’s simply untrue.
Here is goldman sachs saying, over a year ago, that a path to a soft landing is hard but feasible. Here is an economist, from over a year ago, predicting that the chance of a soft landing was going up. Here are 3 economists writing for the Harvard business reviewing saying, back in Februrary, that the chances of a soft landing were good and calls for a recession were premature.
The whole point of the fed’s policy on the rates was to tamp down on inflation while at the same time avoiding a recession. They are, of course, economists. At this point we look like we have good odds to pull of what they were intending to pull off.
I don’t know where you get your information from, but if you thought no one thought was predicting a soft landing until a few months ago, well it’s safe to say you don’t really pay much attention to these things because plenty of economists have been predicting it likely, or going to happen, even for a long time. I’ve only heard a handful of economists even come close to virtually assuring a recession.
A thousand psychics making predictions every day and one being correct proves nothing.
A thousand psychics making predictions every day and one being correct proves nothing.
Untrue, as it proves, without a doubt proves that:
Every economists was predicting recession a few months back.
is untrue.
This is the advantage of basing your opinions off the facts, tas he facts actually support your claims.
Can’t hear you over the sound of thousand of government economists saying everything is fine
The fed is a government economist, at least in some regard, so even that claim falls pretty empty.
But notice how I was able to back up my claims with facts, you just moved the goal posts, without admitting fault, to a new unsupported claim.
You’re not clever, you’re a joke.
Any witches I can follow on Mastodon who provide stock analysis???
No idea. Just buy and hold index funds and you will be fine.
I am unemployed and have been for many months. I have never had issues finding a job, but finding one lately has been impossible. I know of 3 others in the same boat as I. I think that a recession is inevitable at this point. Lucky for me, I have other sources of income. I did have to drastically cut back spending, however.
There is definitely something going on lately. I’m always looking for better jobs on indeed, professional recruiting services etc, trying to improve my situation.
In the last 4 months its been seemingly impossible to even get a response, and I know I’m more than qualified for these positions I’m applying to, and I’ve never had an issue before, even during severe economic downturns.
Same.
This is a nightmare scenario for me. What are the other sources of income, if you don’t mind me asking?
Website advertising and subscription revenue for websites I have owned for years. Spouse income as well.
Here’s my gripe with economists. Even if this wasn’t true, wouldn’t be in the best interest of the economy to lie about it so the market doesn’t get spooked and end up doing things that would make inflation worse?
What other ‘science’ has that nifty feature in it?
Regular medical science, it is called the placebo effect. It only works a bit. Not like you are going to regrow a limb, more like if you had a 40% of getting better on your own you now have a 50%.
Truth is economists can’t predict shit and recessions happen based on numbers not based on feelings. We can’t click our heels together and wish our way to a better world.
My initial thoughts exactly.
A lot of the “scientists” that get laughed out of their field but get their Netflix “documentary” deal seem to use this neat trick.
They’re particularly good at starting with a conclusion then shoehorning in a bad analysis with uncompelling evidence.
Economists predict that now that the rich and ruling class have had a chance to get even rocher even faster, the rest of us will be allowed to catch our breaths just long enough to avoid sweeping reforms and revolutions the next time they pull this bullshit!
They found the sweet spot between oops we broke it again and these poor people seem to be actually accumulating savings
Nah we’ve just become too dependent
Just in time for a tumultuous election
The poor and middle class are sowing, the rich are reaping
"After a historic run-up in inflation, Americans are now starting to see something they haven’t in three years: deflation,” the Wall Street Journal reports.
“To be sure, deflation—that is, falling prices—is largely confined to appliances, furniture, used cars and other goods. Economywide deflation, when prices of most goods and services continuously fall, isn’t in the cards.”
“But economists say goods prices likely have further to fall, which will ease inflation’s return to the Federal Reserve’s 2% target, perhaps as early as the second half of next year.”
deleted by creator
Yeah, that crafty Biden pulled the inflation lever in the Oval Office. It’s right next to the gas prices lever.
deleted by creator
They also do not control inflation so that it goes down in election years. The economy is nowhere near that simple.
Not to mention that the majority party in the house has done nothing but fight with each other and try to impeach Biden.
deleted by creator
Okay? What’s your point? Biden and congress still don’t control inflation.
