US Recession: It’s Technically Coming – Anil Singhvi Explains Why | US economy INCOME ONLY
The US economy is under pressure due to high inflation and supply chain constraints. While the Federal Reserve earlier this week raised interest rates by 75 basis points, for the second time in a row, to curb inflation, data released yesterday showed the US economy has shrunk from April-June for the second consecutive quarter, falling at an annualized rate of 0.9%. This has raised fears of a recession.
According to Anil Singhvi, Business Management Editor at Zee, the US has fallen into a recession according to the data but the government and the Fed are not ready to accept it. “Technically, it’s been said that if US GDP growth data stays in negative territory for two quarters, it’s a recession. GDP falls when you’re not growing… that’s a sign shows that all is not well all year. 2020 is an exception due to Covid. But whenever this happens, America falls into recession,” he said.
“There are two things here regarding recession – recession here is not only in the market but also in the mind. There are typical signs of an economy falling into recession – when there are no jobs for the economy. people, high inflation. , people have difficulty in managing their finances, experienced people are sitting still, companies have no interest to expand… this is a recession recession at a fundamental level,” the market expert said.
“On the economic level, a recession is when companies default, debt is not paying a lot, liquidity in the system is low. But there is no such sign,” he said, seeking to refer to dynamics. force of the US ‘big resignation’ to corroborate its argument. .
“The US market has fallen into a recession technically, not physically,” Anil Singhvi said, adding that there is a difference between a recession and a recession.
क्या अमेरिका में आई है
?
?
…@AnilSinghvi_ #recession #USMarket pic.twitter.com/l37cPscDY8
– Zee Business (@ZeeBusiness) July 29, 2022
Notably, US President Joe Biden and top government officials dismissed concerns that the country’s economy would sink into a recession when GDP growth doubled for two consecutive quarters at around zero. .9% does not mean a recession because unemployment is below 4 percent, housing finance is stable, and there is consumer spending. They argue that inventory has built up and consumers are limiting purchases.
This is the first time in four decades that the US economy grew negative and inflation approached double digits. During the recessions of 1991, 2001, 2008 and 2020, economic growth was negative, but inflation was generally in the 2% to 3% range or lower.