Is US in recession?
Introduction
Based on the latest economic data and expert analysis, the United States is not currently in a recession. Here are the key points:
1. Economic Growth: The US economy has shown resilience, with GDP growing at an annualized rate of 2.8% in the third quarter of 2024, following 3.0% growth in the second quarter.
2. Labor Market: The job market remains strong, with the unemployment rate at 4.2% as of the latest data. Job creation has continued, albeit at a slower pace than earlier in the year.
3. Consumer Spending: Consumer spending, a major driver of the US economy, has remained robust, growing at a 3.7% annual pace in the third quarter of 2024.
4. Recession Probabilities: Various economic forecasts show low probabilities of a recession in the near term:
• J.P. Morgan Research estimates a 35% probability of a US recession starting before the end of 2024.
• S&P Global Ratings maintains a 25% probability of recession over the next 12 months.
• Goldman Sachs Research has lowered its recession probability to 15% for the next 12 months, down from an earlier projection of 20%.
5. Inflation: While still a concern, inflation has been moderating. The Personal Consumption Expenditures Price Index, the Federal Reserve’s preferred inflation gauge, fell to a year-over-year increase of 2.1% in September 2024, close to the Fed’s 2% target.
6. Federal Reserve Policy: The Federal Reserve has begun cutting interest rates, with expectations of further cuts in 2024 and 2025, which should support continued economic growth.
Conclusion
While there are always risks to the economic outlook, including geopolitical tensions and potential election-related uncertainty, the current data does not indicate that the US is in a recession. The economy continues to show growth, albeit at a more moderate pace than in previous years, with a strong labor market and solid consumer spending supporting economic activity.
