“That is not what we are seeing right now. When you look at the economy, job creation is continuing, household finances remain strong, consumers are spending, and businesses are growing.”
Still, Americans are growing weary. According to a Conference Board press release, “Consumer pessimism about future business conditions, moderating labor market conditions, falling stock prices, and weaker manufacturing new orders drove the LEI’s decline in June.”
Richard Goyette, associate at Fannie Mae’s Economic and Strategic Research Group, said a recession would likely begin in the first quarter of 2023 as inflation and rising interest rates increasingly weigh on consumer sentiment and spending.
“Furthermore, the increase in initial unemployment claims to the highest reading in eight months suggests that the labor market is beginning to loosen,” he added.
“If we aren’t yet in a recession, we soon will be,” said Joshua Shapiro, chief US economist at Maria Fiorini Ramirez Inc. “An economy rapidly losing momentum combined with aggressive monetary tightening is not a recipe for a soft landing or any other type of happy ending.”