“Given everything we know, or that we think we know, the United States is not in a recession,” Ms. Sahm said. “But the risk of going into a recession in, say, in the next three to six months? Those have really gone up.”
Reasons for Optimism
Still, by most measures the U.S. economy is slowing down, not stalling out.
Consumer spending, personal income and job growth — all measures used by the National Bureau of Economic Research to determine when recessions begin and end — have remained solidly positive. Gross domestic product, adjusted for inflation, grew faster in the second quarter than in the first, and is expected to show another gain in the third quarter. Other recent data have shown unexpectedly strong productivity growth and a rebounding service sector.
Better still, inflation has cooled significantly, which gives the Fed more leeway to reduce interest rates if the economy weakens further, without worrying as much that doing so will allow prices to start rising quickly again.
Jerome H. Powell, the Fed chair, indicated in a news conference last week — before the jobs report or the market plunge — that the central bank could cut rates as early as its next meeting in September, something investors now view as a near certainty. Some investors expect the Fed to intervene even earlier, although careful Fed watchers consider such an emergency move unlikely.
The challenge for policymakers is that after two years of seeking to slow the economy, they are aiming to do something even more delicate: Get it to level off. And they are trying to do so with imperfect and at times contradictory data, using tools ill suited to such finely calibrated adjustments.
Kaynak: briturkish.com
