Some Triangle residents believe the U.S. economy is already in recession despite economists saying otherwise.
Garner shopper Paul Bischler cited several reasons he believes in the former.
“Based on the prices I see in the grocery store, the gasoline prices [and] the mortgage rates now,” Bischler said. “They affect me, both gasoline and food, as you can see, and two negative quarters of negative growth.”
Inflation is at its highest level in more than 40 years. Also, the economy has contracted for two quarters in a row, which is the common — but informal — definition of a recession. It does not consider several other factors economists consider, such as the job picture.
University of North Carolina at Chapel Hill Kenan-Flagler chief economist Gerald Cohen said two negative quarters are not enough to offset the latest jobs report.
“I don’t think it will be called a recession, and I don’t believe it’s a recession,” Cohen said. “This suggests that the economy is growing again in [the third quarter].”
Cohen said the job market has now surpassed its pre-pandemic high, and unemployment has fallen to its pre-pandemic low.
“Not only did we see [a] healthy jobs number of 528,000, but previous months were revised up again,” Cohen said. “If we were going into recession, if the economy were slowing, you would see the revisions data be downward.”
Garner shopper Brooklyn Blake agreed with Cohen about job creation.
“I mean, if you go around, there’s ‘help wanted’ signs everywhere, so I believe that on the job front,” Blake said.
WRAL News asked North Carolina State University economist Mike Walden that if we’re not in a recession, why do we keep talking about one?
“Obviously, everything gets politicized now, and of course, the administration wants to say we’re not in a recession,” Walden said. “And, I actually would agree with them right now.
“Opponents of the administration want to say, ‘Well, we’ve got this, this rule of thumb, two consecutive quarters negative GDP, so we’re in a recession.’ And so, that’s the political angle.”
Unemployment dropped to 3.5%, matching the more than 50-year low reached just before the pandemic took hold.
On Friday afternoon, President Joe Biden noted, “There are more people working in America than at any point in American history.”
Biden credited the job growth to his policies, even as he acknowledged the pain being inflicted by inflation. He emphasized the addition of 642,000 manufacturing jobs on his watch.
“Instead of workers begging employers for work, we’re seeing employers have to compete for American workers,” Biden said.
Walden thinks inflation is pushing some people back into the job market, which could help ease the labor shortage.
“The one downside is I think this gives more ammunition for the Federal Reserve to raise interest rates,” Walden said.
In late July, the Federal Reserve raised its key rate to a range of 2.25% to 2.5%, its highest level since 2018.
Walden said he thinks inflation has probably already peaked and should already be slowing down some.