America's Talking - New Report Projects Economic Recession Coming for the U.S.

Episode Date: November 23, 2023

A new economic analysis of the U.S. economy projects a recession around the corner. An international nonprofit, The Conference Board, has released its Leading Economic Indicators report, which projects into the next year for the U.S. economy. That analysis, among other things, projects high inflation, high interest rates and declining consumer spending. Support this podcast: https://podcasters.spotify.com/pod/show/america-in-focus/support Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hello and welcome to America in Focus, powered by the Center Square. I'm Dan McAulb, Vice President of News and Content at the Franklin News Foundation, publisher of the Center Square Newswire Service. Joining me again today is the Center Squares Washington, D.C. Bureau Chief Casey Harper. How are you, Casey? Doing good, Dan. How are you? I am doing well, thank you. We are recording this segment early this week on Tuesday, November 21st because of the Thanksgiving holiday.

Casey, what's your favorite part of Thanksgiving? Oh, Dan. Favorite part of Thanksgiving, I think it's a close tie between macaroni and cheese and a family recipe called Corny Cornucon casserole, which is canned corn and eight sticks of butter probably and a few other things. I guess maybe I should say, you know, getting time with the family and the spirit of Thanksgiving. I don't know. Maybe food was the shallow option.

What about you? I'm pondering my reaction to your answer there. The corny corned corn casserole? Yeah, yeah. The most positive thing for me this year is that my son is home from university. He got the entire week off, so he's spending the week with us. So haven't seen him personally since late May, so happy he's home and just going to enjoy spending time with him. Of course, there's the whole meal thing and don't participate in Black Friday shopping.

So family and football, I guess. Casey, we're going to focus on the economy. Because it's Thanksgiving week, let's be. start with a cost of Thanksgiving dinner, which is actually down a little bit this year from last year, but that's really because of two main reasons. Last year's cost of Thanksgiving dinner was at an all-time high because of elevated inflation. And also, the price of turkey is down this year because the avian flu ravaged the turkey population last year. That said, consumers can expect to spend just a little bit less than last year. But I think this year's cost, if not for last year, would,

still be a record high. Tell us about it. Yeah, you're right about that. I mean, I think probably it is a relief to see the headline of, you know, Thanksgiving dinner will be a little bit cheaper this year. But I do feel it's a little misleading because food prices overall have risen this year. They have risen astronomically, actually, since President Biden took office more than almost any other category of goods or service that people can spend money on. And so we are definitely in some of the, in the aftermath of some of the biggest. food price increases that we've seen in a long time. So, yes, it is refreshing to see, you know, that there are, there will be cheaper, but

that's mainly because, of course, the most expensive part of your thanks eat your meal has got to be the turkey. And so turkey prices have gone down because the avian flu was affecting. It's also why egg prices. I don't know if you were following egg prices, but egg prices had really increased as well. And I'm sure our listeners are aware of that. I eat eggs. Of course I'm aware of that.

Yeah, me too. I mean, I try to eat them every day and they got more and more expensive. And the reason for that was the avian flu outbreak, which was increasing those prices. But most other goods and, you know, food things that were increasing in price. And of course, eggs were impacted by this as well was the increase in inflation, just astronomical increase we saw in inflation, which is fueled by a few things. At first, it was impacted by, you know, the COVID supply chain issues. And the Biden administration really tried to blame that. for a while. But even after the supply chain cleared up, the prices kept rising and stayed high. And a large part of that is because there's so much federal debt spending. Of course, we've talked about the debt here. We're in the neighborhood of $34 trillion in debt. We're going to probably be averaging, you know, around $2 trillion deficits. seemingly no end in sight for that right now. So the way that that debt spending is offset by the government is in part by printing money. And when they print that money, they increase the money supply, which they've done significantly in recent years. I mean, at really high level. And that money supply increase leads to

inflation, the evaluation of the dollar, which is what we're seeing. Everything's more expensive. And one more impact of this, I'm sure if any of our listeners are looking at buying a home, you've probably taken note that mortgage rates are just crazy, over 7%. Huge increase. And that's because the Federal Reserve is trying to stop inflation. So they raise the rates to get inflation to slow down. It has slowed down. But now all those food, And prices and everything else is still just as expensive as it was before, actually still getting more expensive. And now buying a home is far more expensive. So, I don't know.

Let's stick with all for your holiday, then. Yeah, thank you for. Thank you for that, Casey. But let's briefly stick with this economic news and all these different indicators because of inflation, because of high interest rates. You wrote a report, you wrote off a report today that shows because of the, you wrote a report. all this negative economic news, we may be heading for a recession. Two years ago, we had two straight quarters of negative GDP growth, which is the definition of recession, but it was not a deep recession by any means, but now there's talk again that we might fall into a recession. Tell us about

that. Yeah, you're right. The recession talk came and went, and maybe it's coming back around right now. The international nonprofit, very well known, called the Conference Board. They do a lot of economic analysis and they've released their what's called the leading economic indicators report. This is where they look at the U.S. economy and they project into the future, maybe six months a year and say how is the economy going to look. And here's a few things to be thankful for Dan this Thanksgiving week. All right. High inflation, high interest rates, and declining consumer spending. That's a few. Not to mention what they say is a quote, very short, quote, unquote, recession. So not a not a good. Not a good.

great look. This is a pretty trustworthy analysis. There's a few reasons for it. It can be pretty complicated, but I think focusing in those high interest rates seemingly are not going to go down anytime soon. Inflation is going to remain elevated. It's not increasing as quickly as it was before, but it is still going up. Of course, the federal debt spending is still going. And one more thing to point out is that the U.S., the federal government's credit rating, international credit score, as a way to think about it, was downgraded earlier this year from AAA to AA plus. And they said, you know, they pointed to several reasons. Of course, the debt is one. But another is this way that we keep coming up to a government shutdown. And then at the last moment, avoiding it the way we don't pass real budgets

anymore, this has made us kind of a more unstable government and a little bit less trustworthy in the eyes of international creditors, which can, of course, increase our interest rates. And Dan, And interest rates are going to be the biggest expense for the American taxpayer going forward, more than defense, more than anything else. Interest on the national debt will be the biggest expense for taxpayers. Well, yeah, thank you for all that bright news. Yes, so much to be thankful for. I'm a grateful person.

I'm grateful to be in America. I love our country. I'm very grateful. But on the economy, it's a tough outlook. Tough outlook. You always sort of cringe when you hear that R word being a recession. but we are, as you mentioned, in the greatest country in the world, no place I'd rather be, I guess, to spin all of that negative news you brought to us and our listeners, I'll just say,

hey, take some time later this week, enjoy your family, enjoy your feast, and think about what you are grateful for, because there's plenty in the United States of America to be grateful for. Casey, thank you for your time and your insight, but we are out of time. Listeners can keep up with all of this economic news at the center square.com for Casey Harper. I'm Dan McKalep. Please subscribe. Thank you for listening.