Some Triangle residents believe the US economy is already in recession, despite economists claiming the opposite.
Garner buyer Paul Bischler gave several reasons why he believes in the former.
“Gasoline prices based on what I see at the grocery store [and] Mortgage rates now,” Bisler said. “They affect me, both gas and groceries as you can see, and two negative quarters of negative growth.”
On Friday, the Bureau of Labor Statistics released the latest employment and recruitment data, showing the US economy added 528,000 jobs in July.
Inflation is at its highest level in more than 40 years. In addition, the economy has contracted for two consecutive quarters, which is the usual – but unofficial – definition of a recession. Many other factors that economists consider, such as job profile, are not considered.
Two negative quarters isn’t enough to offset the latest jobs report, said Gerald Cohen, chief economist at Kennan-Flagler at the University of North Carolina at Chapel Hill.
“I don’t think you would call it a recession and I don’t think it is a recession,” Cohen said. “This shows that the economy is growing again” [the third quarter],
Cohen said the job market is now past its pre-pandemic high and unemployment has fallen to its pre-pandemic low.
“We didn’t just see [a] The number of healthy jobs was 528,000, but the previous months have been revised back up,” said Cohen. “If we were to go into a recession, if the economy were to slow down, you would see the revision data go down. “
Garner’s buyer Brooklyn Blake agreed with Cohen on job creation.
“I mean, if you walk around, there are signs everywhere that say ‘help wants,’ so I think that’s on the job front,” Blake said.
UNC economist: ‘No signs of weakness’ in economy based on jobs report
WRAL News asked North Carolina State University economist Mike Walden if we’re not in a recession, why are we still talking about one?
“Obviously everything is getting political now, and of course the government wants to say we’re not in a recession,” Walden said. “And I would actually agree with him right now.
“Government opponents say, ‘Okay, we understand this rule of thumb, two consecutive quarters of negative GDP, so we’re in a recession. So that’s the political angle. ,
Unemployment fell to 3.5%, hitting a 50-year low just before the pandemic hit.
On Friday afternoon, President Joe Biden said, “More people work in America than at any time in American history.”
Biden attributed the job growth to his policies, although he acknowledges the pain of inflation. He insisted on adding 642,000 manufacturing jobs to his watch.
“Instead of workers begging employers for jobs, we see employers competing for American workers,” Biden said.
Walden believes inflation is pushing some people back into the workforce, which could help alleviate labor shortages.
“One downside is that I think it gives the Federal Reserve more ammunition to raise interest rates,” Walden said.
In late July, the Federal Reserve raised its benchmark interest rate to 2.5% from 2.25%, the highest level since 2018.
Walden said he thinks inflation has likely already peaked and should already be slowing somewhat.