You keep hearing that a recession may be coming. Some economists believe that may be the only way that our country’s economy can get back on track.
“I don’t forecast the future, but the data looks like a recession,” said economist Matt Will, with the University of Indianapolis, talking to WIBC’s Tony Katz. “We still aren’t at employment levels. We still aren’t expanding our productivity, our participation rate is still too low. We still have 11 million job openings. We’re still below the 12-month average for hiring.”
Will said he believes that there are still so many job openings and a worker shortage because some people have decided not to go to work. He cites data that says the U.S. is still at a lower participation rate than before the pandemic, despite the Biden administration claims that the economy has made an astounding recovery.
“The PMI report (Purchasi8ng Manager’s Index) says we have contracted hiring last month. That’s shrinking of hiring. That is recession information,” he said.
If there is a recession you can expect to be affected, or see others suffering. Forbes says that during a recession “the economy struggles, people lose work, companies make fewer sales and the country’s overall economic output declines.”
A recession is where the economy consistently shrinks, rather than expanding.
The Fed (Federal Reserve) has raised interest rates to combat inflation. Will said that forcing a recession may be the only way to get spending under control and drive prices back down, close to normal levels.
“Wall Street believes the Fed is doing the right thing. But, guess what the right thing means? Forcing us into a recession,” he said. “It’s the only way you can get inflation under control is raise interest rates, stop the Fed printing of money, which will slow down the economy and then we’ll get back to an equilibrium.”
Will said we remain out of balance and to get back into balance will be painful.
“It’s your castor oil,” he said of a recession. It will taste nasty. But, grandma knew it was the best thing for you.