US Economy Predicted to Remain Stagnant Despite GDP Growth
The U.S. economy grew significantly in the second half of this year, as Thursday's GDP report showed an increased annualized rate of 2.6% over the last quarter. But economic statistics still point to the possibility of recession due to a slowdown in consumer spending, according to CNN Business.
Former Treasury Secretary Larry Summers said the talk of an economic pivot has yet to be proved by supported data. "I hope the Fed will be clear that it is staying the course on doing what's necessary until we see very clear signs of inflation coming down," Summers told Bloomberg.
Jeffrey Roach, chief economist for LPL Financial said, "excluding the more volatile categories, the trajectory for growth looks weak," per CNN Business. Declines in the housing market, inflation and an "aggressive Federal Reserve" all contribute to uncertainty headed into 2023, Roach said. A KPMG Survey revealed 91% of CEOs believe recession is on its way within the next 12 months—even with improvement in the labor market.
And other economists believe the probability of recession is 50-50, with the split between economic growth and sustainability. "Despite the swing in the headline GDP, conditions on the ground for consumers haven't changed much, and concerns for an economic downturn remain," reads an article from CNN.