The US economy is 100% certain to enter a recession in the next 12 months, according to an economic model devised by two Bloomberg economists and run based on 13 unspecified financial indicators on Monday. What’s even worse is that the apparently inevitable downturn might come even sooner than that – the model returned a 73% chance it would hit within 11 months and a 25% chance it would arrive within ten.
Those outcomes were significantly more grim than the last time Bloomberg ran the model, when it predicted a recession within the year with just 65% certainty. It’s definitely gloomier than the predictions of President Joe Biden, who has insisted the US will avoid the recession so many economists seem to think is lurking right around the corner. If there is a recession at all, Biden says, it will be “very slight.”
Not all experts are certain of the US’ doom – a survey of 42 economists predicted a 60% likelihood of recession over the next 12 months. However, even their outlook had worsened since their last prediction, which gave the country a 50% chance of escaping the downturn.
Another economists’ poll, conducted by the Wall Street Journal on Monday, found a 63% likelihood of recession in the US within the year, pointing to the Federal Reserve’s interest rate hikes, which have come steep and fast after years with no activity. More than half of those surveyed suggested the central bank would keep increasing rates beyond what was healthy, eventually destabilizing the economy.
Inflation continues to hover near its four-decade high, even as the Fed has repeatedly hiked rates in an effort to rein in the soaring cost of living. While Biden has hyped job numbers in the hope of giving voters something positive to credit him for economically, insisting Washington’s finances are “strong as hell” and it’s the rest of the world that has problems, his presidency has left a large hole in the country’s finances. Since entering the White House less than three years ago, Biden has added a whopping $3.37 trillion to the national debt, sending it to a record high of $31 trillion.
While many in the Republican Party – and even some Democrats – blame Biden for the US’ financial misfortunes, his predecessor Donald Trump added over $7 trillion to the national debt as well, largely due to the unprecedented flood of money-printing that accompanied the Covid-19 pandemic.