The spin by mainstream economists and business pundits is in: ‘soft landing’ & no recession 2023.
But consider this: after the 2020 US economy crash and the US $8 trillion fiscal-monetary stimulus ($4T by Fed and $4T in Covid relief programs and Investment subsidies for corporations by Congress), the US economy grew only 5.4% YoY in 2021 (YoY=from Dec. 31, 2020 through Dec. 31, 2021).
Then last year it slowed more dramatically and grew only another 1% YoY in 2022.
Last year’s 4.5% interest rate hikes are yet to fully impact the economy after a typical 9-12 month lag; there are more rate hikes by Fed still to come; and the Fed will keep rates high throughout 2023.
Then add coming fiscal austerity–i.e. social program spending cuts–now being negotiated behind closed doors by McCarthy and Biden under the phony cover called debt ceiling negotiations.
And watch China’s ‘reopening’ post its zero Covid policy to deliver less growth than predicted and expect a severe intensification of Ukraine war to further destabilize global markets and further spike energy and industrial commodities inflation. Result: global trade and exports will slow or even decline. Little to no growth impetus there.
Domestically in US, the housing sector is now in deep recession; US factory output has been contracting now for four months in a row; real consumer spending is increasingly dependent on credit cards (up 40% above normal with 1 of 10 households paying for rent & mortgages with credit cards); real wages contracted another -1.5% last year after -2.3% in 2021; real retail sales for November-December 2022 were stagnant or contracting; small businesses are about to default on debt in record numbers; business inventories were bloated in 2022 (accounting for half of GDP 1% growth) and will be cut dramatically in 2023, and so on.
And pundits are now saying ‘Soft landing” in 2023? Really?
Someone tell them I have a bridge to sell if they wanna buy!