June 5, 2023

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The US economy is nearing the brink of recession

The US economy is nearing the brink of recession

Analysts with economists and global banks insist that tightening monetary policy is one Central Banks (In their head Ooty American) to raise rates Benefit To stop Swelling Lead to elevation Recession Economy, which is defined as the contraction of GDP and the decline in the general economy over a period of 6 months or more, can be seen through higher rates. UnemploymentSales are like a decline, but it does not last more than a year and is milder than depression that lasts longer, and it is considered a normal part of a capitalist economy.

Jerome Powell, chairman of the US Federal Reserve, said the rise in US interest rates risks slowing the economy, but the biggest risk is continued inflation, which raises people’s expectations of prices.

As the leaders of the major central banks at the European Central Bank’s annual conference in Portugal stressed, reducing inflation around the world can be painful and destructive, but must be done quickly to prevent rapid price growth from sustaining.

Rose Cash flow The third estimate released by the U.S. Department of Commerce was 0.1 points higher than the second estimate (1.5 percent) released at the end of May, which is 0.1 point higher than the first estimate (1.4 percent) released at the end of April. According to a Reuters poll, economists expect inflation to remain unchanged at 1.5 percent.

And fell GDP In light of the rise in high inflation The crisis in Ukraine Continuing supply chain disruptions, declining government aid and increasing Govt-19 infections are driven by the clumsy Omigran.

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Expenditure on financial and health services and entertainment products and vehicles is weaker than expected.

But it was somewhat offset by a higher increase than expected Investments Inside Stock Non-residential fixed investment and export.

Rubella Faroukie, chief economist at High Frequency Economics, estimates. Housing cost Higher growth rate in the second quarter.

“But the chances that come after that are uncertain,” Farooqi added, adding that he expects it to continue Economy In this year’s growth, Agence France-Presse said, “but the pace will slow significantly and the risks of a recession will increase.”

Indicate that United States We want to calculate GDP growth at an annualized rate, i.e. compared to the previous quarter, with the results of the previous quarter being pulled throughout the year. If the pace recorded in the last three months continues, it gives an idea of ​​the annual growth.

But other advanced economies such as France The comparison is used on a quarterly basis, not on a yearly basis. According to this calculation, US GDP contracted by 0.4 percent in the first quarter.

The world’s largest economy recorded strong growth of 6.9 percent in the fourth quarter of 2021.

Consumer spending, which accounts for more than two-thirds of the economy, grew to 1.8 percent in the first quarter, from 3.1 percent last month. This reduction reflects downward changes in financial services, insurance and health care.