In life, there are generally no sure things. If two very respected economists are correct, we’re all about to experience one potentially painful exception to that ironclad rule.
There is a 100% probability that we will be mired in a recession in the next 12 months, according to the probability models of Bloomberg economists Anna Wong and Eliza Winger. A story on bloomberg.com Monday broke the news that the projected downturn of the economy a year from now is up from the 65% projection in their previous update.
This news arrives one day after Biden said the economy is “strong as hell” as he was licking an ice cream cone in Portland. He may want to pow-wow with his top advisors and figure out how they will handle this news because Americans with common sense do not doubt that a recession might already be here.
Biden has also said that if there were a downturn in the economy, it would be “very slight,” which sounds preposterous knowing the available data.
The Bloomberg brainiacs crunching the numbers are not relying on hunches; the Bloomberg Economics model that Wong and Winger use have 13 macroeconomic and financial indicators that allow it to predict the chance of the economy slowing down, and they can forecast it as far as one and two years according to the Bloomberg report.
Even though their model calls for the 100% certainty of a recession in October 2023, their information also indicates that the likelihood of it landing sooner is way up. It’s 73% in 11 months, an increase of 43% from their earlier projections.
With midterm elections coming, this news will be used as ammunition for Republicans, and sometime soon, Democratic leaders will have to decide if it’s worth having Biden run for reelection in two years.
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