Larry Summers, a former prominent economic adviser from the former Obama administration issued warnings this past Sunday morning that all indicators for the economy are aimed at a path towards a recession taking place at some point in the next two years.
While making an appearance on “Meet The Press,” Summers stated to Chuck Todd, a news host for NBC, that “a whole range of indicators” — such as relative levels of interest rates over different periods, markets, consumer expectations, and supply and demand — are all making it seem as though a recession is coming. They define a recession as two consecutive quarters of negative economic growth.
“All of that tells me that, while I wouldn’t presume whether to judge the timing, the dominant probability would be by the end of next year we will be seeing a recession in the American economy,” stated Summers, who also held the seat as treasury secretary back in the 1990s. He also stated that his viewpoint had become the more common one as seen from quite a few statistical models and forecasters.
Highlighted historic economic precedents, Summers claimed, as part of a different Bloomberg interview, “If you look at history, there has never been a moment when inflation was above 4% and unemployment was below 5% when we did not have a recession within the next two years.”
The Biden administration, for the most part, has been noting the challenge of the economy but still chooses continues to spout the claim that this economic downturn is not inevitable. Jennifer Granholm, the Department of Energy Secretary, and Janet Yellen, the Department of Treasury Secretary, both spoke to this point while on various Sunday morning news shows, as well.
“I expect the economy to slow,” Yellen stated to George Stephanopolous on ABC News. “It’s been growing at a very rapid rate, as the economy, as the labor market, has recovered. We have reached full employment. It’s natural now that we expect a transition to steady and stable growth, but I don’t think a recession is at all inevitable.”
As stated by a Conference Board Survey of a group of 750 CEOs that was officially put out on Friday, a large majority of high-end company execs seem to think a recession is coming within the next 12-18 months. A quite small minority, 15%, stated in the survey that the region in which their company does business is already experiencing a recession. In a National Association of Manufacturers Survey, almost 60% of business leade3rs seem to think that a recession is quite likely due to recent inflationary pressures.