Recession in the US may come sooner than we think.

By Dr. Kobsak Phutrakul, Deputy General Manager Bangkok Bank Public Company Limited views through #traveling the economy with Dr. Kob that Yesterday, the Fed Atlanta, through its GDPNow model, lowered its Q2 US GDP forecast to -2.1%!!! from the beginning at the end of May which is still expected to grow by 2% Total is a swing down to 4%!!!!

reflects the economic situation of the United States that really then may turn Much slower than the market expected. already doneIf GDP comes out really negative in this quarter This will be the second quarter of the negative US economy. This further means that the United States has entered a Technical Recession.

The Fed Atlanta’s revised downward forecast was a result of lower-than-expected US economic data over the past one month, such as:

– Manufacturing ISM Report on Business figures

– Construction Report numbers

– consumer confidence figures

– Numbers Housing starts

– Inventory Investment numbers

This is in line with the downward revisions of financial institutions and economic analysis firms. more and more worried with the US economy And they think the chances of recession in the US are increasing. Even the Fed chairman said that “The US economy is still strong.”

Many people have the next question that if a recession occurs, how long will it last?

In this regard, Reuters has interestingly compiled information in the image below. Recession usually takes between 2 and 6 quarters.The shortest is after covid. that only lasted 2 monthsBut usually it takes 3-4 quarters.

Except for the period 2008-2009 when the Recession lasted for 6 quarters and it would take another 4-5 years for the economy to return to normal. because at that time The United States has problems from Balance sheet, so it takes time to settle.

1981-1982 as a result of the Fed’s inflation battle.

1973-1975 as a result of oil shocks

For this reason, if we were to estimate roughly how long the recession in this round would take, we would have to say that it might take some time (about 4-5 quarters), such as 1973-1975 and 1981-1982. that the Fed has to manage high inflation to come down to normal

However, when inflation The US economy should be able to recover well. due to this round There were no balance sheet issues like the 2008 subprime crisis.

“Let’s find out later this month, on July 28, what the actual numbers will be and whether the Fed Atlanta GDPNow model will be accurate.”

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.