PREDICTING THE NEXT U.S. RECESSION

COVID-19 not only shook the whole world’s health but, badly shattered the economy too. The pandemic made everyone think of the recession and ways to prevent the same. Presently, the entire world is facing a downright economy making it worse for some nations to survive confidently. Various economists of huge financial giants have warned the worst in the coming years.

Many times, economists have failed to predict accurate forecasts about recessions. However if you have to compare the other countries with the US, all are pretty much on the same wavelength. Forecasting recession is not a piece of cake. What we can say now is that the present situation doesn’t seem to get any better soon. With the drastic fluctuations, changing policies, climatic changes, continuous changes in the environment, forecasting recession doesn’t seem to be simple. One cannot expect an APP or a website where they can enter the year and the predicted information about recession pops out.

However, the forecasters have hinted that the coming months will not be easy either and will pinch further. If you consider the recession of the past few years, you will understand why some economists behave like detectives. Despite the initial warnings on recessions there was little done to curb the same. One of the prominent and chief economists of US, Mr. Gregory Daco stated;

“It got back to me that they thought my estimate was way too pessimistic — there was no way we would be in an environment where the U.S. economy wouldn’t grow because of the virus.”

There is always a light in the darkness. Amidst the pandemic and global lockdowns, much thought has been given to the economic predictions and few seem optimistic. One has to be prepared for the unexpected. Even a common man saves money for unexpected emergency expenses. Similarly, nations have to do the same. If countries consider the past few years’ historical data and recession reports, one can prepare a model to forecast the next US recessions.

The forecasts are difficult but not useless. One can understand the curve and changing trends with the help of these predictions that may be not 100% accurate but good to relate to.