US economy at crossroads amid recession fears: UCLA | Bot To News

December 9, 2022

The US economy is at a crossroads due to fears of a recession; one direction would result in slower, steady growth, while the other would result in a slight, transitory recession, according to a forecast released Wednesday by Anderson of the University of California, Los Angeles.

The forecast notes that the Federal Reserve’s actions to control inflation will determine whether or not the economy goes into recession.

However, the estimate projects that the US will have a strong fourth quarter this year. Anderson’s forecast predicts that in the event of a recession, the economy will shrink at an annual rate of 2% to 3% in the second and third quarters of next year, remain stable in the last three months of 2023, and begin to recover. in 2024.

In the recessionary scenario, consumption is expected to stagnate in the first two quarters of 2023 and then decline moderately in the next two.

Decreasing property prices would be typical of both the recessionary and non-recessionary scenarios, with the recessionary scenario indicating a slightly larger decline. Until the middle of 2023, inflation will decrease at approximately the same rate in both cases.

Overall, both scenarios predict consumption growth for 2024.

The lack of a recession is predicted to be partly due to supply chain pressures easing more quickly and inflation falling more quickly on its own. A reduction in the supply of new houses would moderate the fall in housing prices in the event of a recession.

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