The majority of business economists in the country expect a US recession to start later this year than they previously predicted, after a series of reports pointed to a surprisingly strong economy despite continuously rising interest rates.
Fifty-eight percent of the 48 economists who responded to a survey by the National Association for Business Economics envision a recession this year, the same proportion that said so in the NABE survey in December. But only a quarter thought a recession would begin by the end of March, just half the proportion who thought so in December.
The findings, which reflect a survey of economists from businesses, trade associations and academia, were released on Monday.
A third of economists who responded to the survey now expect a recession to begin in the April-June quarter. One-fifth thought it would start in the July-September quarter.
The delay in economists’ expectations of when a recession will begin follows a series of government reports pointing to a still strong economy even after the Federal Reserve raised interest rates. in eight times in a strong effort to slow growth and prevent high inflation.
In January, employers added over half a million jobs, and the unemployment rate reached 3.4%, the lowest level since 1969.
And sales at retail stores and restaurants jumped 3% in January, the sharpest monthly gain in nearly two years. That suggests consumers in general, who drive much of the economy’s growth, still feel financially healthy and willing to spend.
At the same time, many government releases also show that Inflation rose again in January after being weak for several months, fears that the Fed will raise its benchmark rate higher than previously expected. When the Fed raises its key rate, it usually leads to more expensive mortgages, auto loans and credit card borrowing. Interest on business loans will also rise.
Tighter credit can weaken the economy and cause a recession. Economic research was released on Friday found that the Fed has not been able to reduce inflation from the high levels that have recently been reached without causing an economy.
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