Recession

2022 - 6 - 5

Post cover — Image courtesy of "The Daily Advertiser"

Louisiana job growth expected to slow as country heads toward ... (The Daily Advertiser)

The UL B.I. Moody III College of Business Administration's forecast for the second quarter of 2022 was a mixed bag for the state economy.

Alexandria's total job number is expected to only increase 0.3% over the year, though that is a 3.1% increase from the last prediction. New Orleans is predicted to have 2.4% job growth over the year, and the projection increased 1.3% from Wagner's previous estimate. The Lake Charles area is expected to have 2.7% job growth, and Wagner's projection increased 3.7% since the last forecast. It's a similar story for Hammond, which is expected to have 0.9% growth, though the projection fell 0.4%. Lake Charles was predicted to have 98,700 jobs in the earlier report, but the projection rose 4.7% to 103,300 in the latest forecast. The Shreveport-Bossier area is expected to have 0.9% job growth over the year, an increase of 1.6% from the previous projection. It's a similar story for Houma-Thibodaux, which was projected to have 82,300 jobs during the second quarter. In his latest prediction, he lowered the expected job total to 46,200 — a decrease of 1.5%. New Orleans is projected to add the most jobs with 8,800, which would be 1.6% growth. Baton Rouge is predicted to gain 500 jobs for 0.1% job growth. But in the long-term, many areas could see job growth begin to stall. "Following a decline in real GDP in the first quarter of 2022, forecasters are anticipating growth around 2.0% for the coming year.

Near-Record Inflation And Looming Recession Concerns (Newsy)

Former Treasury Secretary Larry Summers worries the combination of low unemployment and high inflation means a recession is almost certain.

"I think I was wrong then about the path that inflation would take. President Biden dismissing Musk's stark warning of a potential recession. On one hand, the labor market is booming.

Is a recession coming? Here's what CEOs and economists are saying. (BetaBoston)

Last week, JPMorgan Chase chief executive Jamie Dimon predicted an economic “hurricane” stemming from inflation, the Ukraine war, and the Federal Reserve's ...

But a strong labor market and high consumer demand could soften the blow of a future downturn. “And as we look at this portfolio day-to-day, we don’t see anything which is giving us huge concern. “Right now our stance is more defensive than not — I think appropriately so,” said Lee at the Bernstein conference. Other Wall Street executives are delivering similar predictions. “Right now it’s kind of sunny, things are doing fine. We just don’t know if it’s a minor one or Superstorm Sandy.”

A new nuclear era, America's next recession and why you shouldn't ... (The Economist)

A selection of three essential articles read aloud from the latest issue of The Economist | Podcasts.

US recession imminent and inevitable? Not if the Fed can thread the ... (Business Standard)

Based on the critical assumption that the worst economic effects of Covid-19 and the war are behind, Moody's Analytics chief economist Mark Zandi is betting the ...

More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. That means policy makers might not require a “punishing recession” to squeeze inflationary psychology out of the economy, JPMorgan chief US economist Michael Feroli said. That’s all enabling consumers to keep on spending in the face of higher prices for food, gasoline and other necessities. That would be the highest since 2007 and well above the Fed’s current 0.75% to 1% target range. “We can avoid a recession, but we definitely have an elevated risk of one.” Looking further out to late 2023, our model shows the risks of recession are elevated. It’s tough to make it the base case.” In a tweet on Friday, Goldman Sachs Group Inc. senior chairman Lloyd Blankfein suggested that some of the gloom was overdone. Cracks are starting to show in an economy that’s coming off a growth rate that last year reached the highest since 1984. Bigwigs from JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon and billionaire entrepreneur Elon Musk to Gary Friedman, the head of furniture retailer RH, voiced wariness this week about the possibility of a downturn.

Recession Probability Remains Within 40-50% Range (Macro Hive)

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Recession 'not inevitable,' Moody's says (Construction Dive)

Dive Brief: The U.S. economy is not headed toward recession even though the Federal Reserve, aiming to quash the highest inflation in 40 years, has raised the ...

First, U.S. households devote the smallest share of their income to interest and principal payments on debt than at any time in four decades, he said. - “Recession calls are sure to get louder as the Fed continues working to rein in inflation and politicians running in the midterms portray the economy’s struggles to their advantage,” Zandi wrote in a research note. Comparison with past instability in the U.S. economy should also spark optimism, Zandi said. Also, the Fed’s aggressive tightening has worked, bringing down inflation expectations in recent weeks, Zandi said. At the same time, firms have heard a more optimistic view of the economic outlook. “With inflation expectations contained, inflation will recede,” he predicted, adding that the pandemic will continue to fade “and the worst of the economic fallout from the Russian aggression is behind us.”

Consumer Alert: Is U.S. economy headed to a recession (WBAL Baltimore)

In Consumer Alert segment, with rising inflation, high interest rates, and supply chain issues could the U.S. economy be heading for a recession?

Recession Talk Is Exaggerated (advisorperspectives.com)

Physical damage has been confined to a portion of Ukraine thus far, but the risk of a spreading conflict still looms, and the humanitarian consequences weigh on ...

In the 2010s, the U.S. set a new record for length of a growth cycle, but many years of it felt like a slog. The poor performance of global economies in the first quarter added to the anxiety. The U.S., France and Sweden showed gross domestic product contractions in the first quarter, owing to the disruption of Omicron and imbalanced trade. - Energy and food prices are the tip of the iceberg of widespread, persistent inflation. Importantly, the world has learned to live productively with COVID-19. Advancements in prevention, testing and treatment have made an endemic outcome entirely livable. In the course of reopening, consumers are seeking to spend more on services. Supplies of goods are recovering, and demand will not persist at its frenzied pace indefinitely. Demand for housing has pushed residential real estate prices to new highs, but even those high prices have an upside: Consumers who make major investments in housing are gaining wealth. Risks from Ukraine traveled to the rest of the world immediately through energy markets, with oil prices settling at a higher level. Bond markets have also struggled in the context of persistent inflation, tighter monetary policy and elevated uncertainty. - The invasion of Ukraine caught most observers by surprise. Among the chief sources of concern are:

What is the Law's Role in a Recession? (The Harvard Law School Forum on Corporate Governance)

Central banking, COVID-19, Financial crisis, Financial regulation, Legal systems, Liquidity, Monetary policy, Systemic risk. More from: Gabriel Rauterberg · Gabriel Rauterberg is Assistant Professor of Law at the University of Michigan Law School.

A centerpiece of the book is a vivid narrative of the near-collapse of the U.S. treasury market in March 2020, and the spectacular response of the Federal Reserve to those dislocations (pp. 111–54). Policies that delay the process of resolving that inefficiency can lead to the misallocation of resources and poor support to aggregate demand. In the meantime, banks had entered the crisis in a very strong position from both a risk-based capitalization and liquidity standpoint. The fundamental institutional question is evergreen: What is the law’s role in macroeconomic management? Listokin’s principal argument is that there is a valuable but overlooked third option in the policy toolkit—which he calls “expansionary legal policy”—the use of courts, administration, and regulation to further stimulate overall demand for goods and services during recessions. These changes to the practice of fiscal policy and central banking raise fundamental questions about the design of the institutions through which governments intervene in and manage the economy. We develop Law and Macroeconomics’ vision of expansionary legal policy, by applying it to the events of 2020, using Shutdown as our narrative and analytical guide. In 2003, the total assets held by the three largest central banks in the developed world—the Bank of Japan, the European Central Bank, and the Federal Reserve or “Fed” (the central bank of the United States)—added up to roughly $2.5 trillion. Alongside fiscal policy and central banks, what is the role of the rest of the legal system in addressing economic crises and recessions? In Law and Macroeconomics, published in 2019, Listokin asks us to imagine that we are in a deep recession, and that the traditional macroeconomic tools for responding to that recession have reached their limits—central bankers have vigorously deployed monetary policy, while Congress is either unable or unwilling to provide further fiscal support and stimulus. Just the first of those bills, the Coronavirus Aid, Relief, and Economic Security Act (or “CARES Act”), at $2.2 trillion, was already twice the size of the Obama Administration’s principal response to the Great Recession, the American Recovery and Reinvestment Act of 2009. The last two years have seen astonishing changes to how public institutions manage the economy in the United States and other developed countries.

A strong labor market doesn't mean a recession is inevitable (Quartz)

Some people will call this bad news: The Fed won't be able to reign in inflation with modest hikes if the economy is humming along. Instead, it will have to ...

The key distinction is between jobs and wages—the tangible fear is that price increases from any source could launch a vicious cycle of reinforcing wage and price increases. If the Fed’s efforts to lower demand in the economy are effective, we might see the number of vacancies go down, moderating wage growth and inflation without throwing people out of work. If you think unprecedented pandemic relief spending is the culprit, the spending is over. Some people will call this bad news: The Fed won’t be able to reign in inflation with modest hikes if the economy is humming along. When Powell talks about the strength of the labor market, he notes, for example, that job listings far exceed the number of people looking for work. If this sounds insane, well, it’s the kind of logic that makes people look askance at economists.

Recession

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