Frances Donald, Manulife Investment Management global chief economist, and CNBC’s Steve Liesman join ‘The Exchange’ to discuss what the August jobs report signals about the economy, whether we are heading into a recession, and more….(read more)
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The global economy has been hit hard by the ongoing COVID-19 pandemic, leaving many experts predicting a potential recession. Among these experts is Frances Donald, Chief Economist and Head of Macroeconomic Strategy at Manulife Investment Management.
In a recent interview, Donald expressed her concerns about the future economic outlook, stating, “I do see a recession ahead.” Her analysis comes as no surprise, considering the unprecedented nature of the current crisis and the severe economic impact it has had on countries worldwide.
Donald highlights a variety of factors that contribute to her belief in an impending recession. Firstly, she notes the massive disruption the pandemic has caused in global supply chains. The shutdown of factories and businesses around the world has led to a significant decline in economic activity and a sharp increase in unemployment rates.
Furthermore, Donald points out that the severity and duration of the recession will largely depend on the extent of further outbreaks and the effectiveness of containment measures. As we are witnessing a resurgence of COVID-19 cases in various parts of the world, the potential for additional lockdowns and restrictions looms large, which could further dampen economic growth.
Another concern raised by Donald is the potential for a prolonged period of subdued consumer spending. With job losses and income reductions becoming rampant, individuals and households are likely to adopt a cautious approach towards their spending habits. This decrease in consumer spending can have a ripple effect across industries, leading to decreased revenues and potential bankruptcies.
Donald’s insights reflect the prevailing mood among many economists and experts who are warning of a challenging road ahead for the global economy. The International Monetary Fund (IMF) has already projected a 4.9% contraction in global GDP for 2020, a much steeper decline compared to the Great Recession of 2008-2009.
To mitigate the impact of the looming recession, Donald suggests that policymakers should focus on implementing effective fiscal stimulus measures. Governments around the world have already committed trillions of dollars to support their economies, including direct cash transfers, loans, and grants to businesses, and financial aid to vulnerable households.
Moreover, Donald emphasizes the significance of enhanced healthcare systems and robust testing and tracing capabilities as crucial tools for managing the pandemic. Without these measures, containing the virus and restoring economic activities will remain challenging, prolonging the period of economic hardship.
However, Donald remains cautiously optimistic. She emphasizes the importance of adapting to the new normal and acknowledging the opportunities that arise amid the crisis. She notes that businesses that embrace digital transformation and effectively pivot their operations to meet changing consumer needs are more likely to thrive in the post-pandemic era.
While the road to recovery may be long and arduous, economists like Frances Donald play a vital role in providing valuable insights and guidance to navigate through these uncertain times. As we brace ourselves for potentially challenging economic conditions ahead, it is important to heed their advice and implement appropriate measures to mitigate the impact and eventually emerge stronger.
Everytime I heard recession I feel sad
It blows my mind that none of these economists talk about the massively inflated credit card debt that has been building. It perfectly explains the resiliency in the economy despite rate increases that surprised so many people. People are propping the economy up by spending through credit cards. You can only buy so much time with debt before something has to give. This high inflationary/interest rate environment has been crushing people financially and people are continuing to spend like they were before which is now clearly outside of their budget. When the debt reaches a boiling point, that is when the recession is going to hit. The student loans on pause also created a nice tailwind for the economy which is ending this month and is going to add even more hardship to already struggling Americans. I could see the recession hitting very early next year to be frank. I can also see the Fed drastically tanking interest rates in a frenzy to swim upstream a swiftly receding economy.
Remember this… “Nobody Knows Until Everybody Knows.” And When Everybody Knows, IT’S ALREADY TOO LATE.
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Business typically cool hiring during the last quarter of the year : salary savings, financial performance, year end bonuses; but will interview for anticipated hiring in Q1/Q2.
We already in a recession folks
Rather than attempting to predict future recessions and risking financial losses, a more effective strategy is to build a well-diversified portfolio that can withstand various market conditions. This approach has allowed some individuals to consistently generate substantial returns, averaging around 150K every quarter as reported by Bloomberg.
A female version of David Rosenberg.
What is the optimal approach to capitalize on the current market conditions while I'm still unsure about committing $400,000 to my stock portfolio in order to generate dividends and mitigate potential risks?
Recession is forced by the federal reserve to syphon power back into their hands. It is a parasitic entity that is destroying the lives of people.
That’s why Steve is a newscaster and not a hedge fund manager
What is the best way to profit from the current market, meanwhile I'm still undecided about investing $400k in my stock portfolio to get some dvidends and minimize risk
Shes just want her sales figures to come back.
She does not care abount rising inflation
Recession is already here. Only paycheck people don't know about it. I don't know any business person from real sector who is not suffering now.
Recession or not, as long as the Feds keep hiking more interest rates. This means that growth rates will slow down farther. Still the economy is facing a somewhat kind of slowdown. We all know how we got here.
There has been “a recession is coming” for almost 2 years now. Its been here already and I genuinely mean it when I say that this economic recession has left me incredibly angry and exasperated. I have good companies bought but instead of making profits I've lost over a quarter of my portfolio since a year. How else are we supposed to make gains from this market?
Agreed with her. In addition, inverted yield curve was a very accurate prediction for recession…so this time will be different? The more people get bullish, the more likely it will be a hard landing. Government debt exceeded 31T, couple with high interest rate…what is going to happen? Cut spending or increase tax or continue the debt bubble to burst! Something bad has to come. Good luck.
wrong fools
To obtain financial freedom, one must either be a business owner, an investor or both, generating passive income, particularly ona weekly and monthly basis.that's the key to living a financially stab
I am pleased that Ms. Donald got one more chance to speak and clarify. It sounds like we are still just beginning to see the effects of the dramatic Fed interest rate tightening on the labor market and unemployment. I hope this means a Fed pause in September. The risk now appears to be over-tightening.
Yeah, great economy…. let's just add 10 more trillion to the debt so that we never take care of our vets and homeless ever again.
Every fed has said soft landing before every crash look it up
she could use at least 80 pounds of weight loss.
I swear it’s been “a recession is coming” for almost 2 years now
soft landing here we come…… we're on a good approach
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