United States President Joe Biden acknowledged during an interview that a slight recession in the country is possible, but argued that he was not expecting it to happen, despite experts warning of the future of US and global economies.
The Democrat said that if a recession does happen, it will only cause a slight downward movement. It comes as many voters and economists fear an approaching recession and warn that the result of reducing high prices will be laying off workers from their jobs.
US Recession
The situation comes after President Biden signed an emergency bill that sought to prevent a national railroad strike that would have severely impacted the American economy. It would have caused a staggering 765,000 job losses in two short weeks and frozen the country's supply chains.
The Democrat said that the 263,000 additional jobs given in November were proof that his policies have boosted the US economy. He also suggested that the major recession risk was simply the railroad strike, and noted it was already averted after Congress imposed a labor agreement, as per The Hill.
The Democrat added that things were moving in the right direction, noting that with the upcoming holiday season, Americans will be working and the economy is growing. On the other hand, White House officials do see reasons to be optimistic about the situation.
This includes gasoline prices averaging around $3.45 per gallon, which is a sharp reduction from a peak experienced in June. Furthermore, the economy is expanding after shrinking in size during the first half of the year.
According to CNN, on Monday, stocks dipped after the CEO of JPMorgan Chase, Jamie Dimon, issued a warning that the country was likely to enter a recession within the next six to nine months. Furthermore, the National Association for Business Economics polled economists, 72% of whom said that they expected the recession to happen in the middle of 2023 if it has not yet started already.
Read Also : Senate Moves To Avert National Railroad Strike by Passing Legislation Forcing Labor Agreement
Economic Situation
This week, the Bank of America said that the Federal Reserve's battle to address inflation by continuing aggressive interest rates increases will result in the US economy starting to lose tens of thousands of jobs every month starting from early next year.
Concerns regarding inflation and the increased possibility of high interest rate hikes from the Federal Reserve have shaken Wall Street once again. They have also sent long-term bond yields even higher.
On Tuesday, the International Monetary Fund again downgraded its forecast for the global economy. It issued a stern warning that the worst is yet to come, adding that for many people, next year will feel like a recession.
Fed Chair Jerome Powell suggested on Wednesday that the US central bank might not need to raise interest rates as aggressively as before in order to put the inflation back to the annual target of 2%. While that remark resulted in the stock market rising, new and revised wage data released on Friday showed that the Fed might actually need to do more to address the situation, the Associated Press reported.
