It’s not just the weather that’s been missing lately. Some experts predict that the US economy will face the “middle of winter” in the face of the setback of the epidemic, and the US economy will go into recession by the end of 2021. More importantly, the decline in the data is similar to that seen in the aftermath of the financial crisis of 2008.Meanwhile, 38% of US households are facing financial hardship as a result of the pandemic! Does that include you?Economist: US economy could enter recession by the end of 2021A recent study by David Blanchflower, a former member of the Bank of England, argues that if consumer data are used as an indicator, America’s economy will continue to decline for the next six months, perhaps as much as the financial crisis of 2008.The US economy is about as important as it was in 2008! More than a third of American households are running out of money.In a new paper published last week with another economist, Alex Bryson of University College London, The Conference Board’s and the University of Michigan’s consumer expectations indexes tend to predict U.S. recessions 18 months in advance.The consumer expectations index is based on a survey of average American consumers. Questions will include income expectations, job conditions, and expectations for the near-term U.S. economy.According to the economists, both consumer indices have fallen by more than 10 percentage points in every recession since 1980.
The figures for this year are:
The Conference Board consumer index fell 25.3 points;
The University of Michigan consumer index fell 18.4 points;
Compared to the global financial crisis of 2008, when:
The Conference Board consumer index fell 19 points;
The University of Michigan consumer index fell 21 points;
“In our view, there is a good chance that the United States will enter a recession around the end of 2021,” the two economists wrote in the paper’s conclusion.
Blanchflower and Bryson noted that the indexes are critical to understanding the state of the economy because they provide real-time information about what is happening across the country.
“The significant decline in consumer expectations over the past six months, consistent with our rule of thumb for a 10-point decline, suggests that the U.S. economy is now beginning to enter a recession (fall 2021).
However, there are no signs of recession in terms of jobs and artificial growth. This is not reflected in employment trends: America’s unemployment rate is down by a year and the number of jobs is up by a year.
Why will discover this “defending difficult to enter” phenomenon?
Economists reckon that this is because the US government has played a positive role in supporting mission trends, with GDP growth and a flood of jobs smoothing out the impending crisis.
They think GDP growth is almost a year behind and unemployment is skewed by Furlough schemes.
“The economic situation in 2021 is exceptional, as the government’s historic vacation schedule provides unprecedented insight into mission performance trends, allowing the job rate and unemployment rate to recover more quickly from the sharp declines seen in 2020.”
Late in the paper, the two economists present a table for comparison:
“The figures below illustrate the change in the national consumer expectations index between 2007 and 2021. In 2007, it was mainly from May to December, while in 2021, it was mainly from March to September. States’ declines matched those in 2007, just past the Great Recession.
After all, for all Americans, the recent decline was even steeper (25 in 2021 versus 19 in 2007). All of these numbers are consistent with what we would consider a 10 percent decline in a recession.””The decline in these numbers in 2007 was an early indicator of a recession that policymakers and economists missed at the time. Admittedly, these numbers occupy about a misleading excavation.But the consequences of missing these signals, as most policymakers and economists do, are deadly. I hope I don t have to do this again.
Thirty-eight percent of American households face a major financial problem,Big situations invariably affect small families.According to a national poll, 38 percent of American households face significant financial problems as the pandemic continues to affect them. It is difficult to afford even basic medical and food expenses.Image from NPR copyright by the original author,
An analysis of the poll conducted by NPR, the Robert Wood Johnson Foundation and the Harvard School of Public Health:
More than 50 percent of Latino, African-American and Native American families, and 29 percent of white families, are in “financial distress” : unable to afford basic living expenses, rent, utility bills, and medical bills.Image from NPR copyright by the original author
The currency stretched so sharply, but artificially did not rise much:
The survey, conducted from August 2 to September 7, 2021, surveyed approximately 3,616 adults over the age of 18 and revealed a number of other things, either implicitly or indirectly:
American household incomes are sharply differentThe poll also reflects the plight of American families across the income spectrum: 59% of households making less than $50,000 a year admit to struggling financially in the past few months.
Only 18% of households earning more than $50,000 a year reported significant financial distress.And Americans’ savings are being drained: 19% of households said they ran out of supplies during COVID-19.The financial setbacks suffered by Black families were even more significant: 31 percent said they had lost everything; Among Latino and Native American households, more than a quarter said they had run out of money.
I can’t afford rent.True, the federal government has doled out several bailouts to try to ease the burden on the public, but only 67% of participants in the poll said they had received any.With less money in hand came additional difficulties.When the federal moratorium on dissolution expired in August, 27 percent of renters nationwide said they had been unable to pay their rent in the past few months.Houston’s rent woes are particularly significant, with 53 percent of renters saying they can’t afford rent.
Social welfare is declining and the mentality is collapsing.Not only economically, but also psychologically, the epidemic has taken a huge toll on Americans. With half of all families reporting that at least one member of the household has had a major depression, anxiety or stress problem in the recent months, many Americans struggle with mental health issues.In addition to concerns about the pandemic, minorities are also at risk of hate crimes. Racial hate crimes have been on the rise since the COVID-19 outbreak, with a 6% increase in 2020 compared to the previous year.One in four AsiAn-Americans admitted during the pandemic that they were constantly worried that someone would attack their family because of their race, according to the poll. The same is true of 22 percent of Native Americans and 21 percent of African-American households.In terms of their children’s schoolwork, 69 percent of parents said that their children’s schoolwork progress was delayed by the epidemic. Of those, 36 percent thought their children were falling behind academically.Even now that the new school year has begun, 70 percent of parents think it is difficult to make up for what they have missed during the pandemic.
