The US economy is entering a recession, given all the bad economic news, but don’t expect officials to admit it until after the midterm elections.
While the bond market is in a historical freefall, the inflation rate is officially over 8%, a level not seen since the 1980s while home mortgage rates are now over 7%.
“New economic numbers show that the average American has lost the equivalent of $4,200 in annual income under the Biden administration because of inflation and higher interest rates,” reports the Heritage Foundation. “Heritage experts calculated this shocking number based on different sets of data.”
“Consumer prices have risen 12.7% since January 2021, significantly faster than wages, so that the average American worker has lost $3,000 in annual purchasing power.”
Both the Dow and the S&P 500 declined for six straight days – and the S&P hit its lowest level since 2020.
However, the media is still asking the question if – and not when – the US will enter a recession, with Forbes even claiming a recession can still be “avoided altogether” due to the jobs market still holding up “reasonably well.”
“…Two quarters of negative growth, as we’ve seen so far in 2022, is a good rule of thumb for identifying recessions,” Forbes reported. “However, the National Bureau of Economic Research (NBER) makes the final call.”
“That can take some time as they look at all the data and the early estimates, such as we saw this morning, are refined over the coming months.”
Interestingly, Forbes also admitted that “in fact, almost all the time in recent decades, when the National Bureau of Economic Research (NBER) has announced a recession it has coincided with at least two quarters of negative economic growth.”
That is, until now, which is good for incumbent politicians who don’t want a recession during midterms.
However, that might not even matter if the public and the markets believe a recession is already ongoing – and public perception is more critical than official designations.