Home » World » Report: Big banks warn of big problems for US economy this year | Unemployment | US Labor Market | Inflation

Report: Big banks warn of big problems for US economy this year | Unemployment | US Labor Market | Inflation

[The Epoch Times, 5 gennaio 2023](Reported by Epoch Times reporters Jiang Linda and Yujing Los Angeles) ConUS labor marketgood performance,inflationThe temperature is cooling and many economists are still relatively optimistic about the US economic performance in 2023. But the big banks and large financial institutionsforecastQuite the opposite.

According to a majority of economists from 23 major financial institutions polled by the Wall Street Journalforecast, the US economy will enter a recession in 2023 and millions of Americans will lose their jobs. These institutions include investment banks that do business directly with the Fed.

The report also noted that two institutions expect the US recession to occur in 2024. Credit Suisse, Goldman Sachs, HSBC, JPMorgan Chase and Morgan Stanley believe the US will manage to avoid a recession altogether.

Interest rates remain high in 2023 unemployment rateor peak

In the past 2022, the Federal Reserve raised interest rates several times at the fastest pace in more than 40 years to ease economic pressure and fight theinflationresulting in constant fluctuations in the housing market and the stock market.

For the week ending December 29, 2022, the 30-year fixed mortgage rate averaged 6.42%, according to Freddie Mac. While this figure is down from its peak in October and November last year, it is more than double compared to a year ago.

Despite vigorous interest rate hikes to curb inflation, the stubbornness of inflation in the US is frustrating. According to data released by the US Department of Labor on Dec. 13, the consumer price index (CPI), which measures inflation in November, rose 7.1% year on year, well below above the Fed’s healthy target of 2%.

The minutes of the Federal Reserve’s December meeting released on Jan. 4 showed that Fed officials will continue to fight inflation through high interest rates and that interest rates in the United States will remain high for some time to come.

But high interest rates will causeunemployment rateclimb. Most economists polled by the Wall Street Journal also see the unemployment rate worsening this year and peaking above 5%. This means that millions of Americans will lose their jobs.

IMF: The worst is yet to come

In its latest semi-annual global economic outlook, released in October, the International Monetary Fund (IMF) said inflation in the US will fall to 3.5% this year from 8.1% in 2022, but in many others countries inflation is expected to fall higher. The IMF has warned that inflation will “remain elevated for longer than previously forecast”.

“More than a third of the global economy will contract this year or next. And the three largest economies, the United States, the European Union and China, will continue to stagnate,” the IMF wrote in the report. , the more The worst is yet to come. For many, 2023 will look like a recession.”

Fortunately, many economists expecting a recession in the US believe it will be a “shallow” one.

Economist at UCLA Anderson School of ManagementYu Weixiong(William Yu) analyzed in a previous interview that this economic downturn will not have the subprime mortgage financial crisis in 2008, so the public need not panic excessively.

The key to avoiding a recession, he said, is whether the global supply chain can be improved. However, according to the analysis of the fundamentals of the US economy, the recession will not be too deep. He suggested that people cut spending, hoard money and keep steady jobs to survive the recession.

Epoch Times English-language reporter Tom Ozimek contributed to this article. ◇

Responsible Editor: Fang Ping#

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