Source: Business Insider —
No, the US economy isn’t in a recession yet. But some of its key industries might be, suggesting the desired “soft landing” is far from a sure thing.
Bloomberg economist Anna Wong, for instance, recently put the chances of a US recession this year at 80%. But as more industries fall into downturns of their own, she said it could become increasingly difficult for the US economy to avoid the same fate.
“We have a manufacturing recession, a housing recession, a tech recession,” she said in a Bloomberg post last week. “Things are starting to add up.”
It’s possible, however, that the US simply experiences a “rolling recession,” Loyola Marymount University finance professor Sung Won Sohn told CNBC. In this scenario, parts of the economy would “take turns suffering rather than simultaneously” — and the broader economy would never reach recession status.
Recent GDP and retail sales figures point to a slowing but still-growing economy, and economists say the US could enter a recession in 2023. That said, the labor market is still shockingly good, with the US adding a surprisingly large 517,000 jobs in January and seeing the lowest unemployment rate since 1969. Jobless claims figures over the past month remain low despite layoffs in Big Tech.
If the US economy does ultimately fall into a recession, it will partially be because the following three industries dragged it down with them.
The Fed’s efforts to cool rising prices may have doomed housing
Ever since the Federal Reserve began raising interest rates to combat inflation, experts knew it could be bad news for the housing industry. Rising rates have led to elevated mortgage rates which, in combination with already-high home prices, have dampened demand.
