{"id":504366,"date":"2022-10-28T00:58:11","date_gmt":"2022-10-27T21:58:11","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/why-the-gdp-rebound-isnt-soothing-recession-concerns\/"},"modified":"2022-10-28T00:58:11","modified_gmt":"2022-10-27T21:58:11","slug":"why-the-gdp-rebound-isnt-soothing-recession-concerns","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/why-the-gdp-rebound-isnt-soothing-recession-concerns\/","title":{"rendered":"#Why the GDP rebound isn\u2019t soothing recession concerns"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2553810e26b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2553810e26b\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/why-the-gdp-rebound-isnt-soothing-recession-concerns\/#Why_the_GDP_rebound_isnt_soothing_recession_concerns\" >Why the GDP rebound isn\u2019t soothing recession concerns<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/why-the-gdp-rebound-isnt-soothing-recession-concerns\/#Trade_flows_skewed_our_view_of_the_economy\" >Trade flows skewed our view of the economy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/why-the-gdp-rebound-isnt-soothing-recession-concerns\/#The_last_hurrah_for_consumer_spending\" >The last hurrah for consumer spending?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/why-the-gdp-rebound-isnt-soothing-recession-concerns\/#Softer_domestic_sales_spell_trouble\" >Softer domestic sales spell trouble<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/why-the-gdp-rebound-isnt-soothing-recession-concerns\/#The_housing_sector_is_falling_hard\" >The housing sector is falling hard<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/why-the-gdp-rebound-isnt-soothing-recession-concerns\/#Inflation_is_slowing_but_not_fast_enough\" >Inflation is slowing, but not fast enough<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"Why_the_GDP_rebound_isnt_soothing_recession_concerns\"><\/span>Why the GDP rebound isn\u2019t soothing recession concerns<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2022\/10\/hiring-sign_jobs_092722ap-nam-y-huh_recession.jpg?w=900\" \/><\/p>\n<div>\n<p>U.S. economic growth rebounded sharply during the third quarter, according to data released by the Commerce Department on Thursday, rising at an annualized rate of 2.6 percent and proving that the U.S. has avoided a recession thus far. <\/p>\n<p>But beneath a strong headline number were several warning signs of a deeper slowdown ahead.<\/p>\n<aside class=\"ad-unit ad-unit--mr1_ab\">\n<\/aside>\n<p>While household spending and exports helped fuel a strong quarter of growth, both are likely to fall as higher interest rates and inflated prices weigh on buyers. <\/p>\n<p>Meanwhile, declines in business spending and other crucial economic engines are likely to accelerate as the global economy slows.<\/p>\n<p>Here\u2019s why the latest gross domestic product (GDP) estimate isn\u2019t soothing recession anxiety. <\/p>\n<h2><span class=\"ez-toc-section\" id=\"Trade_flows_skewed_our_view_of_the_economy\"><\/span><strong>Trade flows skewed our view of the economy<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Much of the ebb and flow of U.S. GDP over the past year has been driven by short-term trade shocks fueled by the uneven recovery from the COVID-19 pandemic.<\/p>\n<p>Over the first six months of the year, U.S. households gobbled up imports and foreign buyers, reeling from global shocks, spent much less on American exports. While the U.S. economy was still somewhat strong, the imbalance turned GDP growth negative in the first and second quarters.<\/p>\n<p>That dynamic reversed in the third quarter, according to the Commerce Department data released Thursday, as American households spent much less on imported goods and exports to foreign countries rebounded sharply, thanks in part to U.S. energy exports.\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr2_ab\">\n<\/aside>\n<p>But as Europe slips into recession, experts say the U.S. won\u2019t be able to count on exports propping up growth again.<\/p>\n<p>\u201cWe see signs of weakening trade flows in early Q4 with the precipitous decline in ocean freight rates and congestion at domestic ports in October highlighting the impacts of waning US domestic demand. Meanwhile, the strong dollar and weakening global demand will drag on exports,\u201d wrote Oren Klachkin, lead U.S. Economist at Oxford Economics, in a Thursday analysis.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_last_hurrah_for_consumer_spending\"><\/span><strong>The last hurrah for consumer spending?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Despite stubbornly high inflation and rapidly rising interest rates, consumer spending has grown over the past two years. Personal consumption expenditures, which make up roughly one-third of GDP, rose 1.4 percent in the third quarter after rising 2 percent in the second.\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr3_ab\">\n<\/aside>\n<p>Spending on goods has fallen steadily throughout the year, dipping 1.3 percent in the third quarter alone, after Americans spent far more on physical items than services for much of 2020-2021. Services spending rose 2.8 percent, but may also reflect higher prices for health care and shelter that are not subtracted from GDP data.<\/p>\n<p>While the Federal Reserve may be heartened by slowing spending on goods, growth in services spending may prompt the bank to keep ratcheting up interest rates until households begin to pull back even more.<\/p>\n<p>\u201cLooking ahead, gradually cooling job growth and softening wage gains, coupled with depleting savings buffers, elevated prices and more costly borrowing rates, will constrain consumer spending,\u201d Klachkin explained.<\/p>\n<aside class=\"ad-unit ad-unit--mr4_ab\">\n<\/aside>\n<h2><span class=\"ez-toc-section\" id=\"Softer_domestic_sales_spell_trouble\"><\/span><strong>Softer domestic sales spell trouble<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Consumer spending may still be on the rise, but another key driver of U.S. growth <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ears to be flattening out.<\/p>\n<p>Final sales to private domestic purchasers \u2014 or, the money American households and businesses spend on U.S.-made goods and services \u2014 rose just 0.1 percent in the third quarter. It was the fourth quarter in a row that the metric declined.<\/p>\n<p>Economists use final sales to private domestic purchases to gauge how the economy is faring without the impact of volatile trade flows or federal government spending. Steady declines in these sales may lead to slower growth and hiring in the future.<\/p>\n<p>The economy \u201cclearly is at risk of falling into recession in the near term,\u201d wrote Joe Brusuelas, chief economist at audit and tax firm RSM, in a Thursday analysis.<\/p>\n<p>\u201cIt is critical that policymakers and firm managers prepare for a slowdown in demand.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_housing_sector_is_falling_hard\"><\/span><strong>The housing sector is falling hard<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>While the U.S. economy has held up so far against rising interest rates, the housing sector is crumbling.<\/p>\n<p>As home sales and prices plunged over the past three months, spending on residential construction plummeted 26.4 percent in the third quarter \u2014 almost 10 percentage points higher than the 17.8 percent decline in the second quarter.\u00a0<\/p>\n<p>The Fed has likely triggered a recession within the housing sector by rapidly raising interest rates throughout the past year. The average 30-year fixed mortgage rate is now north of 7 percent after being below 3 percent in early 2021, making homes increasingly unaffordable even as prices drop.<\/p>\n<p>\u201cNow both mortgage purchase applications and pending sales are below 2018 levels. A four-year setback is a serious correction. With mortgage rates still elevated, we are in for further sales declines, but those should eventually bring price relief to those who need to move this winter,\u201d wrote Taylor Marr, Redfin\u2019s deputy chief economist, in an analysis.\u00a0<\/p>\n<aside class=\"ad-unit ad-unit--mr5_ab\">\n<\/aside>\n<h2><span class=\"ez-toc-section\" id=\"Inflation_is_slowing_but_not_fast_enough\"><\/span><strong>Inflation is slowing, but not fast enough<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>One unequivocal bright spot from the Thursday GDP report was a steep drop in one measure of inflation.<\/p>\n<p>Prices rose 4.2 percent during the third quarter, as measured by the personal consumption expenditures price index, the Commerce Department\u2019s inflation gauge. That\u2019s much slower than the 7.3 percent inflation rate seen in the second quarter.<\/p>\n<p>Slowing inflation may help assure Fed officials that their rapid interest rate hikes are having some dampening effect on price growth. Even so, the third quarter inflation rate is still twice the Fed\u2019s annual target and just one of several ways the bank judges where prices are going.<\/p>\n<p>\u201cWith inflation unlikely to retreat significantly in the near term, we expect the Fed to hike by another 75 [basis points] at next week\u2019s November\u2026 meeting and 50 [basis points] in December\u201d Klachkin wrote.\n<\/p><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/thehill.com\/policy\/3708467-why-the-gdp-rebound-isnt-soothing-recession-concerns\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Why the GDP rebound isn\u2019t soothing recession concerns U.S. economic growth rebounded sharply during the third quarter, according to data released by the Commerce Department on Thursday, rising at an annualized rate of 2.6 percent and proving that the U.S. has avoided a recession thus far. But beneath a strong headline number were several warning&#8230;<\/p>\n","protected":false},"author":1,"featured_media":504367,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2022\/10\/hiring-sign_jobs_092722ap-nam-y-huh_recession.jpg?w=1280","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[134344,134723,134417,134343,74694,73798,87575,5069,70522,82991,75236,70551,134540,134724,134345,4965,134725],"class_list":["post-504366","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-administration","tag-american-exports","tag-blog-briefing-room","tag-campaign","tag-consumer-spending","tag-defense","tag-economic-growth","tag-economy","tag-gdp","tag-housing-market","tag-imports","tag-inflation","tag-overnight-defense","tag-price-increases","tag-state-watch","tag-technology","tag-us-economy"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/504366","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=504366"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/504366\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/504367"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=504366"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=504366"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=504366"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}