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Leading American economists believe that probability of another recession in the USA has increased recently. Europe isn’t doing much better, though. Despite that, there are optimists who believe that there won’t be any new economic downturns.
Leading economists estimate probability of another recession within the next 12 months at 33%. They doubt that the Federal Reserve will be able to prevent it.
Respondents which were surveyed by The Wall Street Journal also indicated that probability of already ongoing recession in the USA was 15%. However, it is not officially recognized yet, which is usually done by a special committee of leading economic experts, and their estimation is based upon certain factors – like, for instance, steadily decreasing GDP for at least two quarters in a row.
Today’s estimates of a new recession in the USA are the highest since the previous economic downturn. Besides, they are 4% higher as compared to the previous survey in August. Experts also lowered their expectations for GDP growth rate for the next year to less than 2.5%.
Tension in the economy was intensified, accompanied by panic on financial markets which was caused by unstable recovery of the labor market in the US and serious doubts concerning stability of the Eurozone’s economy.
The Wall Street Journal is not the only one with bleak expectations: not long ago The New York Times also wrote that probability of the second wave of recession had sharply increased and had probably reached 50%, if the last decades’ experience is considered. It is like a “circulus vituosus” for America’s post-crisis recovery: expectations of consumers get worse - they cut their consumption expenditures which leads to decrease of production, lower employment, and even worse expectations of consumers, then it goes again.
Source: Finmarket
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