{"id":544789,"date":"2023-01-28T14:00:00","date_gmt":"2023-01-28T11:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/what-recession-inflation-gdp-offer-hope-for-soft-landing\/"},"modified":"2023-01-28T14:00:00","modified_gmt":"2023-01-28T11:00:00","slug":"what-recession-inflation-gdp-offer-hope-for-soft-landing","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/what-recession-inflation-gdp-offer-hope-for-soft-landing\/","title":{"rendered":"#What recession? Inflation, GDP offer hope for \u2018soft landing\u2019"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 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-6a36ed4078b0d\" 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-6a36ed4078b0d\" 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\/what-recession-inflation-gdp-offer-hope-for-soft-landing\/#What_recession_Inflation_GDP_offer_hope_for_%E2%80%98soft_landing\" >What recession? Inflation, GDP offer hope for \u2018soft landing\u2019<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"What_recession_Inflation_GDP_offer_hope_for_%E2%80%98soft_landing\"><\/span>What recession? Inflation, GDP offer hope for \u2018soft landing\u2019<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/01\/yellenjanet_01102023ap.jpg?w=900\" \/><\/p>\n<div>\n<p>Perhaps a 2023 recession can be avoided after all.<\/p>\n<p>Consistently falling prices alongside a stronger-than-expected fourth-quarter gross domestic product (GDP) and next week\u2019s anticipated less aggressive interest rate hike from the Federal Reserve are changing economists\u2019 tune and renewing hopes about the overall health of the economy.<\/p>\n<aside class=\"ad-unit ad-unit--mr1_ab\"><\/aside>\n<p>The personal consumption expenditures price index (PCE) cooled to 5 percent annually last month from 5.5 percent in November, Commerce Department data showed Friday, mirroring a drop in the consumer price index (CPI) from 7.1 percent to 6.5 percent over the same period. The CPI has dropped every month since June, when it peaked at 9.1 percent annually.<\/p>\n<p>The day before, data came down showing that the U.S. economy grew at an expectation-beating rate of 2.9 percent in the last three months of the year, down slightly from 3.2 percent in the third quarter but high enough to result in annual growth of 2.1 percent. The GDP contracted in the first and second quarters of 2022 following the huge recovery of 2021.<\/p>\n<p>U.S. production levels are now basically in line with where they were prior to the pandemic, using seasonally adjusted measurements and correcting for inflation.<\/p>\n<p>The positive numbers have some economists chiding market commentators for being overly pessimistic in their characterizations of the economy over the course of 2022, a year in which many Americans believed a recession had already begun.<\/p>\n<p>\u201cWorst. Recession. Ever,\u201d University of Michigan economist Justin Wolfers joked online after the release of the GDP data.<\/p>\n<p>\u201cThere\u2019s a lot to be said about these latest GDP data, but I think the thing it underscores is that it\u2019s now official: There was no recession in 2022. All that talk, all that energy, all that bluster, was nonsense all along,\u201d Wolfers added.<\/p>\n<aside class=\"ad-unit ad-unit--mr2_ab\"><\/aside>\n<p>Harvard Kennedy School economist Jeffrey Frankel, a former member of the committee at the National Bureau of Economic Research that officially designates recessions, told The Hill that he\u2019s still hearing sentiment about the prospects of a recession this year, but he doesn\u2019t think it\u2019s accurate.<\/p>\n<p>\u201cMany economists have gone way overboard in talking as if a 2023 recession is all but inevitable. I would put the odds of a recession this year at something like 35 percent,\u201d Frankel said in an email to The Hill.<\/p>\n<p>The strong U.S. recovery along with the rapid drop in consumer prices is leading some commentators to revisit the characterization of inflation as \u201ctransitory\u201d \u2014 a notion that had been disavowed by economists over the summer as annual price increases climbed above 9 percent, leading even Treasury Secretary Janet Yellen to say that she had been wrong about inflation and didn\u2019t fully understand what was causing it.<\/p>\n<aside class=\"ad-unit ad-unit--mr3_ab\"><\/aside>\n<p>\u201cAt this point the burden of proof lies on anyone claiming that we had more than a, well, transitory inflation spike that\u2019s mostly behind us,\u201d New York Times economics columnist Paul Krugman wrote online last week.<\/p>\n<p>Former Federal Reserve banker Claudia Sahm said the same thing in December, writing that \u201cthe burden of proof is on the inflation hawks now.\u201d<\/p>\n<p>\u201cWith the steady stream of more optimistic data on inflation and a path to a soft landing taking form, it is time for the hawks to explain themselves,\u201d she wrote in a weekly <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>letter. \u201cReality shows a \u2018soft landing\u2019 in 2023 in the United States taking shape. We avoid a recession, we keep the job-full recovery, and inflation moves back down. Hawks, it\u2019s time to join us in reality.\u201d<\/p>\n<aside class=\"ad-unit ad-unit--mr4_ab\"><\/aside>\n<p>University of Massachusetts economist Arin Dube pointed the finger at \u201cpublic-facing economists\u201d for failing to accurately convey the strength of the economic recovery after the coronavirus pandemic.<\/p>\n<p>\u201cIt\u2019s not just politicians and the press,\u201d Dube wrote online Thursday. \u201cToo many public-facing economists have downplayed the recovery over the past two years.\u201d<\/p>\n<p>Perhaps the most vocal of those economists has been former Treasury Secretary Larry Summers, who made the case time and again that inflation was a much more persistent problem than the Fed was making it out to be and would require years of high unemployment in order to correct.<\/p>\n<aside class=\"ad-unit ad-unit--mr5_ab\"><\/aside>\n<p>During a speech in London last year, Summers said the economy needed five years of unemployment above 5 percent to contain inflation properly.\u00a0<\/p>\n<p>\u201cIn other words, we need two years of 7.5 percent unemployment or 5 years of 6 percent unemployment, or one year of 10 percent unemployment,\u201d he said.<\/p>\n<p>In fact, inflation has been falling even as unemployment has remained around a 50-year low of 3.5 percent, suggesting that price spikes during the pandemic have less to do with the labor market than with other factors including supply shocks and profit maximization tendencies among firms.<\/p>\n<aside class=\"ad-unit ad-unit--mr6_ab\"><\/aside>\n<p>The reason that so many of these estimates have been off is outdated modeling and economic thinking, according to investor and founder of Westwood Capital Dan Alpert.<\/p>\n<p>\u201cThe people who have their academic careers and their business forecasting careers based on economic modeling and macroeconomics that grew up from micro-fundamentals over the 30 years from, say, the late 1970s until the end of the century \u2014 they\u2019re heavily invested in a way of looking at the world that ties into \u2026 labor\u2019s impact on prices,\u201d Alpert told The Hill in an interview.<\/p>\n<p>\u201cBut those models don\u2019t really <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>ly to a fully fiat world where you really don\u2019t have constraints on currency and you\u2019ve got credit developing through multiple channels and you have massive asset inflation without having a lot of goods and services and wage inflation,\u201d he said.<\/p>\n<aside class=\"ad-unit ad-unit--mr7_ab\"><\/aside>\n<p>But even amid all the positive data, there are some potential signs that the U.S. economy could be slowing down.\u00a0<\/p>\n<p>Friday\u2019s PCE numbers showed a drop of 0.2 percent in consumer spending in December, larger than the 0.1 percent drop in November. The drop in spending was confined mostly to the goods sector.<\/p>\n<p>The Philadelphia Federal Reserve anticipates more sluggish growth in 2023, at a rate of 0.7 percent for the year, as the Fed continues with its program of monetary tightening.<\/p>\n<p>\u201cOvertightening of monetary policy would drive the world economy into an unnecessarily harsh slowdown, an outcome that could be avoided,\u201d the United Nations economists warned in their World Economic Situation and Prospects report released Wednesday.<\/p>\n<p>\u201cWhile it is still too early to determine whether central banks in developed countries, in particular in the United States and European countries, have overtightened monetary policy, this risk should not be ignored. The \u2018taper tantrum\u2019 in 2013 remains fresh in memory, where the Federal Reserve\u2019s announcement that it would taper bond purchases im<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>tely led to sharp increases in government bond yields. Treasury bond sell-offs\u00a0spilled into corporate bond markets and disrupted equity markets,\u201d they wrote.<\/p>\n<\/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 News 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\/finance\/3833694-what-recession-inflation-gdp-offer-hope-for-soft-landing\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What recession? Inflation, GDP offer hope for \u2018soft landing\u2019 Perhaps a 2023 recession can be avoided after all. Consistently falling prices alongside a stronger-than-expected fourth-quarter gross domestic product (GDP) and next week\u2019s anticipated less aggressive interest rate hike from the Federal Reserve are changing economists\u2019 tune and renewing hopes about the overall health of the&#8230;<\/p>\n","protected":false},"author":1,"featured_media":544790,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/01\/yellenjanet_01102023ap.jpg?w=1280","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[81188,134343,70610,90482,88069,115,131619,134345],"class_list":["post-544789","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-janet-yellen","tag-campaign","tag-finance","tag-house","tag-larry-summers","tag-news","tag-paul-krugman","tag-state-watch"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/544789","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=544789"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/544789\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/544790"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=544789"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=544789"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=544789"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}