DENVER, CO – The U.S. economy still has considerable momentum and is not currently on the verge of recession.
That statement comes from Dan Kowalski, vice president of CoBank’s Knowledge Exchange, who says, however, economists have never been more pessimistic, and there are legitimate reasons for concern.
In the past, according to a new CoBank report, inflation over 5 percent has never been “tamed” without a recession. “As financial conditions continue to tighten, we expect the U.S. economy will steadily soften through the first half of 2023, ushering in a brief, modest recession,” he explains.
One area of concern is an indirect decline in consumer spending if unemployment rates climb to 5 percent or higher. “Without this softening in the labor market and the associated slowing of wage gains and spending,” Kowalski adds, “it will be difficult to stabilize prices.”
Inflation in November was lower than expected as the U.S. economy experienced a broad-based slowdown in consumer prices.
On Tuesday morning, the government reported the Consumer Price Index (CPI) climbed over 7 percent last month over the reading from November 2021.
Despite the increase, it was the smallest since last December.
CNBC reports that “the average U.S. household spent $396 more per month to buy the same goods and services it did a year ago – down from $433 in October, according to Moody’s Analytics.”
(SOURCE: All Ag News)
