S&P Ratings: Likelihood of US Economy Avoiding Recession in 2023 Dimming

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S&P Ratings: Likelihood of US Economy Avoiding Recession in 2023 Dimming

S&P Ratings: Likelihood of US Economy Avoiding Recession in 2023 Dimming

WASHINGTON (Sputnik) – The chances that the United States can avoid a recession next year are diminishing as rising commodity prices and interest rate hikes… 11.28.2022, Sputnik International

2022-11-28T20:44+0000

2022-11-28T20:44+0000

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“With the US economy likely to avoid a recession in the next 12 months, we continue to expect the US to enter a recession in 2023,” said Beth Ann Bovino, chief economist for S&P Global Ratings. “We now expect GDP growth to slow to -0.1% in 2023. U.S. GDP from peak to trough will fall 0.8%, a mild recession in line with the 1969/1970 recession.” Rising prices and interest rates in the United States are eating away at the purchasing power of the private sector, the press release said. While the U.S. economy has been cushioned by some momentum this year, the main concern is what lies ahead in 2023, such as extremely high prices and aggressive rate hikes, which will weigh on affordability and aggregate demand, the press release said. In addition, according to S&P Global Ratings, the conflict in Ukraine, tensions over Taiwan and the economic slowdown in China contribute to the likelihood of the US economy entering a recession. S&P Global Ratings clarified that this update does not constitute a rating action for the US economy.

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US economy, recession, US rate hikes, US federal reserve, economic slowdown

US economy, recession, US rate hikes, US federal reserve, economic slowdown

WASHINGTON (Sputnik) — The chances that the United States can avoid a recession next year are diminishing as rising commodity prices and interest rate hikes are expected to weaken spending in the country, Standard and Poor’s Global Ratings said in a press release Monday.

“With the US economy likely to avoid a recession in the next 12 months, we continue to expect the US to enter a recession in 2023,” said Beth Ann Bovino, chief economist for S&P Global Ratings.

“We now expect GDP growth to slow to -0.1% in 2023. U.S. GDP from peak to trough will fall 0.8%, a mild recession in line with the 1969/1970 recession.”

Rising prices and interest rates in the United States are eroding the purchasing power of the private sector, the press release said.

This April 13, 2019 file photo shows homes in a Salt Lake City suburb.  - Sputnik International, 1920, 28.11.2022

‘Collapse is Coming’: Experts anticipate sharp fall in US real estate prices

While the US economy has been protected by some momentum this year, the biggest concern is what lies ahead in 2023, such as extremely high prices and aggressive rate hikes, which will depress affordability and aggregate demand, the release said.

In addition, according to S&P Global Ratings, the conflict in Ukraine, tensions over Taiwan and the economic slowdown in China are contributing to the likelihood of the US economy slipping into recession.

S&P Global Ratings clarified that this update does not constitute a rating action for the US economy.

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