Going into Tuesday’s State of the Union address, President Joe Biden sees a nation with a glowing economic future. But Republicans take a far gloomier view. They say the nation is saddled with debt and that Biden is largely responsible for inflation.
One group of experts can read the data and claim a recession is on the horizon. A different group can focus on a separate set of figures and see reason to rejoice. It’s a disorienting moment.
Gus Faucher, PNC Financial Services’ chief economist, pegs the odds of a recession this year at 60%. But he said any downturn would be “mild” because “worker shortages will limit layoffs, consumer balance sheets are in great shape, the banking system is solid.” To bring down inflation, the Fed has tried to slow down hiring and growth by raising its benchmark rate over the past year. When Biden delivered the State of the Union Address in 2022, the Fed’s benchmark rate was effectively near-zero. It’s now over 4.5%, the fastest increase in four decades, and“Without price stability, the economy does not work for anyone,” Powell told reporters after the Fed board’s most recent meeting.Ever since the 2008 financial crisis, the U.S.
“Because the supply of labor has been so starved for the past two years, firms are holding on to who they have,” Tannenbaum said. “The prevailing wisdom is if we have a recession it’s going to be shallow. Firms are going to want to be ready to go.”
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