US Has Dipped Into Recession As Worried Consumers Flash Warning Signs: Economists

By NY Post
Posted on 10/18/21 | News Source: NY Post

The US economy is careening into another recession, two noted economists warn, as worries about the labor market and the coronavirus have worsened dramatically over the past two months.

The alarm bells are ringing as bad news piles up at the economy’s door: Prices on everyday goods are rising sharply as inflation is stuck at 30-year highs. Supply chains snarled during the pandemic mean some store shelves are bare. A labor shortage in some industries has left jobs undone. And the ultra-contagious Delta variant has put a damper on the rush back to the office.

“We are entering a recession — we are on the precipice of a recession,” one of the study’s authors, David Blanchflower, told The Post. “It’s always good to have an early warning.”

Even as vaccination rates rise and Covid deaths fall across most of the US, sentiment among consumers and workers has soured considerably as the year draws to a close, the economists say — contrasting sharply with the happy talk coming out of the White House that things are getting better.

Sentiment has deteriorated so rapidly, in fact, that two widely respected indicators of consumer feelings now are flashing red — indicating the US economy has already dipped into negative territory, the economists warn. The same indicators were flashing red ahead of the 2008 global financial crisis.

Blanchflower, a professor of economics at Dartmouth College and a former member of the rate-setting committee of the Bank of England, and Alex Bryson of University College London, point to declining consumer confidence as a bellwether for recession.