Yet another warning has been issued of an economic downturn in the US — but will the Biden administration finally take heed?
Economists polled by a Canadian-based news agency said they expected to see a "short and shallow" recession next year, and predicted the US Federal Reserve Bank would raise interest rates by another 0.5 percent in a bid to keep inflation below its target of no more than two per cent.
"Unless inflation recedes quickly, the U.S. economy still appears headed for some trouble, though possibly a little later than expected," said Sal Guatieri, a senior economist at BMO Capital Markets. "But this assumes the economy's durability doesn't compel the Fed to slam the brakes even harder, in which case a delayed downturn might only flag a deeper one."
But Treasury Secretary Janet Yellen is still in denial, pointing to a recent fall in rents following a sharp rise as evidence that the worst was over.
"I believe we're on the right track in terms of lowering inflation and that recession is not inevitable," Yellen told reporters in Fort Worth, Texas on Thursday.
It was not the first time that Yellen has blithely dismissed the risks of recession, as the US takes its share of pain from the global energy, food and minerals shortage caused by Washington-led sanctions on Russia.
Just just over a week earlier, New York-based credit ratings agency S&P Global predicted a 0.8 percent decline in GDP next year following on from a similar warning of a "shallow" recession in October.
And in late October, the Conference Board said its Consumer Confidence Index slumped to a three-month low, also warning of a downturn.
The other big US ratings agency, Fitch, warned of a recession on October 19. At the same time, former Treasury Secretary Larry Summers said the Fed was unlikely to meet its inflation target "without a meaningful recession."
A 'Transition' Economy?
The treasury secretary has stubbornly refused to accept the economy is faltering under the pressure of the West's self-inflicted energy crisis.
"This is not an economy that's in recession. But we're in a period of transition in which growth is slowing," Yellen said in July. "A recession is a broad-based contraction that affects many sectors of the economy. We just don't have that."
That comment echoed Biden's dismissal of record-high filling station prices in May — claiming they were just part of an "incredible transition" to a brave new world which would be "less reliant on fossil fuels."
His government has drained almost half of the US Strategic Petroleum Reserve over the past year in its attempts to stop gas prices becoming a major issue ahead of November's midterm elections.
In June, Yellen identified the causes of inflation as "global, not local," but still denied the US was headed into a recession.