Some residents of the Triangle believe the U.S. economy is already in recession, despite economists saying otherwise.
Garner buyer Paul Bischler gave several reasons why he believes the former.
“Based on the prices I see at the grocery store, gas prices [and] mortgage rates now,” Bischler said. “They affect me, and gasoline and food, as you can see, and two negative quarters of negative growth.”
On Friday, the Bureau of Labor Statistics published the latest information on employment and recruitmentfinding out that in July The US economy added 528,000 jobs.
Inflation has reached its highest level in more than 40 years. Also, the economy has contracted for two consecutive quarters, which is the common, but unofficial, definition of a recession. It does not take into account some of the other factors that economists consider, such as the employment pattern.
Gerald Cohen, chief economist at the University of North Carolina at Chapel Hill Kenan-Flagler, said two negative quarters were not enough to offset the latest jobs report.
“I don’t think it’s going to be called a recession, and I don’t believe it’s a recession,” Cohen said. “This shows that the economy is growing again [the third quarter].”
Cohen said the labor market has surpassed pre-pandemic highs and unemployment has fallen to pre-pandemic lows.
“Not only we saw [a] the healthy jobs number is 528,000, but prior months have been revised upward again,” Cohen said. “If we were to go into a recession, if the economy were to slow down, you would see the revisions coming down.”
Garner buyer Brooklyn Blake agreed with Cohen about the job creation.
“I mean, when you walk around, there are ‘help wanted’ signs everywhere, so I think it’s on the work front,” Blake said.
WRAL News asked North Carolina State University economist Mike Walden that if we don’t have a recession, why do we keep talking about it?
“Obviously everything is politicized right now, and of course the administration wants to say we’re not in a recession,” Walden said. “And I would really agree with them now.
“Opponents of the administration want to say, ‘Well, we have this rule of thumb, two consecutive quarters of negative GDP, so we’re in a recession.’ So, this is a political angle.”
The unemployment rate fell to 3.5%, matching the more than 50-year low reached just before the pandemic.
On Friday afternoon, President Joe Biden noted, “America has more people working than at any time in American history.”
Biden attributed the job growth to his policies, even as he acknowledged the pain caused by inflation. He emphasized that 642,000 manufacturing jobs will be created on his watch.
“Instead of workers asking employers for jobs, we see employers having to compete for American workers,” Biden said.
Walden believes inflation is pushing some people back into the labor market, which could help ease labor shortages.
“One downside is that I think it gives the Federal Reserve more ammunition to raise interest rates,” Walden said.
In late July, the Federal Reserve raised the key rate to a range of 2.25% to 2.5%this is the highest level since 2018.
Walden said he thinks inflation has probably already peaked and should be slowing down a bit.
Triangle economists explain that Friday’s jobs report points to a possible recession
Source link Triangle economists explain that Friday’s jobs report points to a possible recession