Experts are warning that a U.S. recession may be hard to avoid.
Transcript:
REBECCA WALSER: Recession is always really follow, really indicated by a couple of factors when you start to see the number of hours worked. So what a lot of employers will do, they’ve learned the tricks of the trade. Right and what they will do is they’ll say, well, we’re not laying people off, but we are. And we’re paying people more money per hour, but they’re cutting the hours. So we like to look at the Fed charts that overlay, you know, hours worked with, all of the forward indicators. And we see Yeah this is a problem. So we’re looking at hours worked. And if we start to see hours work getting cut. And if it gets cut exponentially. Then that is the precursor to layoffs. If layoffs start to come because economic activity globally slows down and we know that the purchase managing index, we know PMI and a lot of the leading indicators are a problem.
The other thing that’s really a tower bucket is the consumer sentiment. University of Michigan has had consumer sentiment down three months in a row. I think it’s kind of fair to say that’s to be expected, when you have a new administration that’s implementing policy, that’s disruptive globally and is affecting the markets. So that would make investors be more skeptical and to the downside and consumers more skeptical to the downside. But if we continue to see hours cut, layoffs start to come, and consumer sentiment, which means that affects retail spending and that comes down and gets curbed to the downside, then we’re starting to really think, is the recession coming because consumers tell us a recession is coming before the actual GDP contraction happens.
From my perspective about a recession for 2025, I mean, I think that it would be very easy to get into a recession if the market are adversely retaliates against the Trump tariff policy, and we don’t see globalization and stabilization if we get negative reactions that get ingrained into international trade policy, then I think it would be very easy for us to be, you know, into a recession. And the reason for that is we already saw global economic activity, shipping slowdown, manufacturing slowdown. We’ve already seen indicators that the global energy look at the energy prices. We were in the 70s. Now we had a day where we touched into the mid 50s to the low 60s. So we’re really seeing potential slowdowns. And that is an indication that, OK, if the world is slowing down, we in America are consumption based on the services side of things. We’re a service consumption based economy.
And so if the world is slowing down and we’re not getting the goods to come over here and we’re not buying them, then we’re going to really easily be in a recession. And it’s almost like we have to fight very hard to stay out of recession because we’ve had so much money printed since 2020 and coronavirus that, like our budget and our spending in America is $7 trillion, which is basically wartime level, pandemic level spending. We’re only collecting $5 trillion. So to be spending at a pandemic wartime level every year forever is lunacy. And we can’t afford it. And it should put our economy into a recession.
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