Consumer prices rose 3.8% in the last 12 months as inflation decreases slowly. Economist Mitch Roschelle explains why he doesn’t think a recession is coming this year.
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Could a recession come in the second half of the year? | Morning in America
The COVID-19 pandemic has undoubtedly taken a toll on the global economy, with countries worldwide grappling to deal with its aftermath. In the United States, the first half of 2021 has witnessed a remarkable recovery, dubbed the “Morning in America.” However, with lingering uncertainties and potential challenges on the horizon, the question arises: could a recession be lurking in the second half of the year?
Before delving into the possibilities, it is essential to acknowledge the progress that has been made in the US economy. The initial lockdowns and restrictions resulted in an unprecedented recession in 2020, leading to a sharp decline in economic activity. However, through extensive vaccination campaigns and targeted economic stimulus, the American economy rebounded impressively in the first half of 2021. Consumer confidence soared, businesses reopened, and unemployment rates steadily declined, fostering an atmosphere of optimism and growth.
Nonetheless, several factors cast shadows over this optimistic scenario. One significant concern is the emergence of new COVID-19 variants, such as the Delta variant, which has shown increased transmissibility and resistance to some vaccines. If widespread outbreaks occur, the subsequent imposition of new restrictions could impede economic growth and potentially trigger a recession.
Furthermore, supply chain disruptions continue to haunt various industries. The pandemic-induced closure of factories and disruptions in logistics channels have created a severe strain on global supply chains. This has led to scarcity of raw materials, delayed deliveries, and increased costs. If these disruptions persist or worsen, it could hinder production, decrease consumer spending, and ultimately lead to a downturn.
Inflation is another factor that has become a growing concern in recent months. As the economy reopens and demand surges, prices for goods and services have risen considerably. Commodity prices, such as those of lumber and oil, have skyrocketed, while labor shortages in certain sectors have driven up wages. If unchecked, sustained inflation could erode consumer purchasing power and undermine economic stability, potentially triggering a recession.
The Federal Reserve’s response to these potential threats will play a significant role in shaping the trajectory of the economy. The central bank has maintained an accommodative monetary policy throughout the pandemic, keeping interest rates near zero and injecting stimulus into the financial system. However, as inflation concerns grow, there is growing speculation about when the Fed might begin tapering its stimulus measures or even increase interest rates. The timing and effectiveness of these decisions will undoubtedly impact the economic landscape in the second half of the year.
While uncertainties persist, it is crucial not to discount the resilience of the US economy. Historical data indicates that the American economy has often demonstrated the ability to recover and adapt in the face of crises. As vaccination rates rise and the population gains more protection against the virus, the chances of a severe downturn diminish.
Ultimately, predicting a recession remains a complex task, particularly amid the ever-evolving nature of the pandemic. The American economy has shown remarkable strength in the first half of 2021, but it would be wise to remain cautious and vigilant concerning the potential risks that lie ahead. By closely monitoring key indicators, policymakers and businesses can take proactive measures to mitigate potential recessional threats and ensure a sustained recovery well into the future.
I’ve been through so much these past years to the point where I just gave up and laid there for weeks waiting to get better, but I knew nothing would get better and I’m just stuck in one place or just repeating a lot of stuff that happened that I knew would not get better, but one day I just decided to get away from the things that hurt me and try to be as happy as I can be and make the best of it.
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It's not inflation! It's corporate greed. These companies are making record profits.
Fascists have always resorted to censorship because they can't have their fragile narratives challenged so News Nation, why are you constantly deleting and censoring comments from anyone who dares disagree with you?
We found that you are one of the worst channels in terms of censoring comments. You deleted comments made that simply stated Obama expanded us from 2 wars to 7 wars, an undeniable fact.
It's amazing because when we disagree with conservatives on their channels, they never censor our comments.
Yet whenever it's a left leaning channel or site, they act like fascists, censoring anyone who dare challenges their narratives with basic facts.
Do you mean could it continue? We’ve been in a recession for the past 18+ months. Stop with the insanity on changing what a recession is defined as.
In the past two years, more money has been printed than that last 100 years combined and done so needlessly. I had to triple checked this because it was so staggering.
This coupled with the fact that we went from complete energy independence and low fuel prices to the Biden administration shutting down the majority of our fuel production and are now importing our fuel from China, Russia, Iran, and Venezuela.
Biden also shut down the Keystone Pipeline so now all of that fuel has to be transported by thousands of diesel fuel using semi trucks which not only drives up costs of everything on the store shelves but vastly increased carbon emissions.
These factors have pushed the dollar to it's limits as inflation has been set on an unstoppable course of not just inflation but stagflation.
My brother works in the fuel industry. His state of Colorado had 13 fuel production sites until 2017, when it nearly doubled under the Trump administration to 25 locations. Now, due to the Biden of administration, do you know how many locations are left? Two! Just two sites as the rest cannot meet the insane requirements because the permits they are granted have so many regulations, it's impossible for most companies to implement without incurring a loss.
The economy is the best since 1969.Unemployment the best in years.Inflation will take care of itself. After the pandemic and following a Republican President,Democrats have always been left to clean it all up.
The widely predicted U.S. recession remains out of sight as the first half of 2023 winds down, but the consumer sector that has fueled a remarkable recovery from the pandemic shutdowns may finally be showing signs of fraying.
The signals that economists lean on to gauge the odds of a recession are contradictory at the moment. The yield curve remains deeply inverted, and manufacturing surveys have been flashing recession signals for months. But layoffs concentrated in the tech sector have not spread widely so far, and there are pockets of consumer strength, such as travel, that look like a downright boom.