How to look at the risk of economic recession in the United States (Global Hot Spot)

Food counter in a supermarket in New York, USA.

Photo by Wang Ying, a reporter from Xinhua News Agency

Recently, the US Department of Commerce released data showed that in the second quarter of this year, the GDP (GDP) of the United States (GDP) calculated by 0.9%at an annual rate, shrinking for two consecutive quarters.

Under normal circumstances, if an economy's GDP has a negative growth for two consecutive quarters, it can be regarded as a technical recession. Whether the US economy declines or not is eventually announced by the National Institute of Economic Research (NBER). However, many foreign media such as the Associated Press, Reuters, and other foreign media have recently reported that the reality of negative growth in GDP for two consecutive quarters has caused people to worry about the US economy may fall into recession.

Falling into "technical recession"

According to the latest data from the US Department of Commerce, the US GDP in the second quarter of this year calculated by 0.9%at an annual rate, which was shrinking again after the decline of 1.6%in the first quarter. The data shows that in the second quarter of this year, about 70%of the personal consumption expenditure of about 70%of the US economy increased by 1%, the increase was slower than in the first quarter; After the decline in private inventory investment in the first quarter, the second quarter continued to drag the economic decline by 2.01 percentage points.

In this regard, some US media pointed out that after two consecutive quarters of shrinking, the US economy has fallen into a technical decline.

The United States "News Weekly" reports that consecutive quarter contraction is a typical sign of decline and is often used to define recession. It is reported that the National Economic Research Institute of the United States is responsible for studying and judging whether it has recession. The research institute's definition of recession is that "economic activities in the entire economy generally decreased significantly and last for several months."

Before the research and judgment of the National Institute of Economics of the United States came out, the White House continued the previous caliber when the White House responded to the negative growth in the second quarter, indicating that the US economy had never fallen into a decline. President Biden, Minister of Finance Yellen, and Fed Chairman Powell recently came out to appease the people's hearts and denied that the US economy entered a recession. However, Yellen acknowledged at a press conference that the economic growth of the United States has slowed down significantly, and there are "many risks" in the prospects.

"According to the data released by the US Department of Commerce, it is a fact that the US economy falls into a technological recession. Next, the National Economic Research Institute of the United States will judge whether the US economy will be judged based on a series of indicators such as employment level, output, income, manufacturing activities, and enterprise sales. Entering the recession. At present, the relevant economic data in the United States in the second quarter show that consumption has begun to be weak, and non -residential fixed asset investment and private inventory investment have also shrunk, which shows that the high inflation rate in the United States has affected personal consumption and enterprises. Investment, the structural problems of the US economy are emerging. "Chen Fengying, a researcher at the Chinese Institute of Modern International Relations, analyzed in an interview with our reporter.

"Japan Economic News" pointed out that in order to avoid labels that failed to be laid in the mid -November election, senior US government officials resolutely denied that the economy had fallen into decline. However, since 1949, a total of 10 technical recessions in the United States have been officially identified as economic recession. Several Japanese economists pointed out that the confidence of American consumers has deteriorated sharply due to the surge of inflation. After the Fed's continuous interest rate hikes, personal consumption slowed down, equipment investment declined, residential investment plummeted, industrial production data also showed weakness, and the US economy was rapidly cooling.

Lack of effective system constraints

The United States "New York Times" reported that whether the US economy has fallen into a decline, economic growth has slowed down, corporate steps are difficult, and tens of millions of families have been defeated by prices is an indisputable fact.

A polls jointly carried out by the US Broadcasting Corporation and Market Research Institutions Yipuso showed that more than 2/3 Americans believed that the US economy was deteriorating and reached the highest level since 2008. At the same time, the support rate of the Biden government in a series of related issues continued to decline. The survey showed that 62%of Americans opposed the Bayeng government's work in dealing with the economic recovery, and rated the Bayeon government to deal with inflation problems even worse, and 69%expressed disapproval.

"In the first quarter of this year, the US economy was soft. In addition to the influence of factors such as the new crown pneumonia and the Federal Reserve's interest rate hikes, one more important is that the US economy has not appeared in endogenous recovery. Before The large -scale economic stimulus plan adopted after the Biden government came to power. Since the end of 2021, the Bayeng government has begun to withdraw from some economic stimulus plans, which has a great impact on the US economy. " In an interview with this reporter, Sun Lipeng pointed out that the lack of effective constraints of US economic policies is a deep illness that has caused problems in the US economy. Earlier, in order to cope with the impact of the epidemic and stimulated the rapid rebound, the Bayeng government launched more than $ 5 trillion in economic stimulus plans, and the monetary policy and fiscal policy were not effectively restrained. , Trigger a series of sequelae.

Hampho Mossi, a professor of economics at the University of Damasalam, Tanzania, said recently that the current economic difficulties in the United States are due to various factors such as their own policies. In order to curb inflation, the Federal Reserve announced the fourth rate hike since the end of July, and it was also the second consecutive interest rate hike 75 basis points to exacerbate its own economic recession risk. On the other hand, the United States holds a negative position in economic globalization and multilateralism, provoking trade disputes, causing domestic domestic commodity prices to remain high, which has caused economic pressure. It is also believed that the US economy has not yet fallen into a comprehensive decline, which is mainly due to the unexplained rate of unemployment. This is because monetary policy tightening is transmitted to the existence of the real economy. In the future, as the Fed continues to raise interest rates and monetary policy, financial conditions will be significantly tightened, residents' demand and corporate investment will decline, and the unemployment rate will rise.

"The U.S. inflation rate in June has reached 9.1%. In this context, the Federal Reserve raised its interest rates sharply and eventually stifled the US economy to decline. At present, American Wall Street analysts are generally worried that the US economy will fall in the 20th century to 70 to the 20th century to 70 to In the 1980s '"stagflation'. In history, under the combination of high oil prices and interest rate hikes, the US economy decline is almost inevitable. Many signs show that the US economy has only one step away from stagnation to slide to decline." All need to be alert to the negative spilling effect of the United States on the global economy. In order to transfer domestic people's dissatisfaction with poor economic conditions, the United States may further internationalize domestic issues.

"Tail Effect" drags the world

Recently, many international institutions have lowered US economic growth expectations. Georkeva, president of the International Monetary Fund (IMF), said that the way to avoid decline in the US economy is narrowing, and the US economy is facing severe downward risks for the past two years. According to the policy path described by the Federal Reserve's June monetary policy conference, the IMF will reduce the expected US economic growth from 3.7%in April to 2.9%this year, and the growth expectations in 2023 will be reduced from 2.3%to 1.7%. Georkiya also said that the United States tightening monetary policy and slowing economic growth will have a wide range of impacts.

"In the short term, considering factors such as mid -term elections, the Bayeng government will not control inflation at the cost of sacrificing economic growth. Therefore, in the future, U.S. inflation will hover high. But it has not yet reached the top. The tightening of the US macroeconomic policy is still a big direction. "Sun Lipeng analyzed that the Fed's interest rate hike process will accelerate the return of global capital to the United States. Export atrophy, currency depreciation, capital evacuation, and the risk of debt crisis intensify.

Chief Economist, Permata Bank, Indonesia, Jacusia Paldde, said that in the context of the highest level of inflation in the United States to the highest level in 40 years, the weakened domestic demand dragged its economic performance. The performance of the month is worse, which may further drag the world economy and have a significant impact on emerging economies including Indonesia. Jonia Parddee analyzed that exports of ASEAN countries such as Indonesia are bound to be affected by the decline of the US economy. In addition, concerns around the Federal Reserve's interest rate hikes and US economic recession will also stimulate market risk aversion, leading to capital outflows from emerging economies, thereby triggering debt issues and depreciation of local currency. Emerging economies will be forced to introduce various policies to stabilize the exchange rate. The Indonesian central bank may increase interest rates in the second half of this year, and interest rate hikes will increase the cost of borrowing costs of various domestic departments and institutions, dragging down the Indonesian economy.

"The overflowing effect of the US macroeconomic policy adjustment is comprehensive. In fact, due to the influence of the US financial hegemony, not only the emerging economies are unable to resist the impact, but the developed countries are also difficult to escape. At present, the central banks of many countries have already In order to avoid the depreciation of the country's currency and prevent capital outflow, I have to follow the Federal Reserve's interest rate hike decision. "Chen Fengying said.

Japanese media and experts pointed out that the Fed's radical monetary policy has a negative impact on the world economy. While increasing the import prices of emerging market countries and worsening debt burden, it also impacted developed economies such as Japan. Since the beginning of this year, the yen has depreciated by about 20%of the US dollar, further magnifying the impact of energy increases on the Japanese economy. At the same time, in view of the facing downward risks of the world economy, the decline in external demand will make the environment of the Japanese economy recover more severe. (Reporter Yan Yu)

"People's Daily Overseas Edition" (06th edition of August 13, 2022)

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