Source: First Finance
Author: Zhu Ying
Whether the US economy enters the recession in 2023 is a global question.An analysis shows that the US macroeconomic press release has a significant impact on global asset prices. After the release, the stock price index and commodity price of 27 countries around the world will fluctuate instantly.Therefore, paying attention to the U.S. economic trend has become a must -have homework for observing the target of the economic direction.
2022 High inflation caused concerns about economic recession
In 2022, the US economy was plagued by high inflation.Since April 2021, U.S. inflation has risen all the way, and the inflation rate in 2021 has increased by 7.9%year -on -year.In October 2022, the US Consumer Price Index increased by 8.2%year -on -year, reaching the highest level in 40 years.
High inflation caused the Fed to be targeted by pushing high interest rates.From March 16, 2022, the Fed will increase the interest rate of the benchmark federal fund by 0.25 percentage points from a level close to zero.This is the first rate hike since the Bank of the United States since 2018, marking an important step in the United States to cancel the super loose monetary policy.Since then, the Fed has raised interest rates continuously.
Goldman Sachs expects the Fed in March and May to raise interest rates by 25 basis points again, and the highest fund interest rate will reach 5%to 5.25%.According to the experience of "Great Inflation" in the 1970s, the interest rate of the benchmark federal fund will be linked to the economic recession by more than 5%.Infay interest rate hikes will inevitably increase the cost of investment and consumption, and curb investment and consumption will lead to economic recession. This is the result that the market does not want to see.
The Fed's determination to be inflation is higher than concerns about recession.Judging from the Fed's anti -inflation experience, the Fed will not give up determination to be targeted at inflation because of market voices.The annual inflation rate in the United States in 1970 exceeded 4.5%, and in 1974 and 1980 was about 10.5%, which was the highest level of inflation in American history.In the "Great Inflation" era, the Federal Reserve gave birth to a master of "inflation dragon", which is Paul Walc.The journey of Walker's curbing high inflation has changed from "public enemies" to "American heroes."
On March 7 this year, Fed Chairman Powell said that the pace of economic growth in the United States is faster than expected.This may promote the Federal Reserve decision -making personnel to increase interest rates at the pace of pre -planning, in order to control consumer prices that continue to rise.Powell's statement is to cool the US economy.According to the US Department of Labor, 517,000 new jobs in the United States in January were far exceeding expectations.This number surprised those economists who are expected to slow down. At the same time, the unemployment rate dropped to 3.4%, a new low in 53 years.There seems to be no signs of decline in the US economy, thereby increasing the confidence of the Fed's interest rate hike, because the inflation rate has not returned to the target value of 2%.
How likely is the possibility of economic recession in the United States
The sounds from the US market are almost singing the US economy.At the end of February, 58%of the 48 economists from the National Business Economic Association predicted that the US economy would decline at some time in 2023.On March 5, the World Federation of Large Enterprises Federation predicts the probability of economic recession at nearly 99%based on the probability model.The main reason for the recession is the Federal Reserve raising interest rates, and believes that the actual GDP growth rate in the first three quarters of 2023 may be zero or negative.
Goldman Sachs believes that the possibility of economic recession in the United States is very low.Goldman Sachs believes that the possibility of US economic decline in 2023 is 35%, and the impact of interest rate hikes on the peak of GDP growth is loaded early.In other words, over time, the Fed's radical policy of the GDP growth of the United States will fade back.Goldman Sachs gave three reasons: the first is that the unemployment rate in the United States is low; the second is that the inflation rate is declining; the third is that the GDP growth rate in the third and fourth quarters of the United States in 2022 was 2.6%and 2.9%, respectively.It shows that the interest rate hike is stronger than expected, and the economy is still growing.
The difference in predictions comes from the difference in interpretation information and the percentage of use, and each economist or model has different practices.Some people may pay more attention to unemployment data than others, while others may filter some parts of the data, which leads to different conclusions from the same information.
The fact that the market is coming to recession is to play with the Federal Reserve.The conflict between investors' expectations and Federal Reserve policies and how this contradiction will be resolved has become one of the biggest doubts in the US financial market in 2023.Investors believe that since the inflation rate is declining, the Fed should slow down interest rates, otherwise, the increase in interest rates will target the economy.The Fed does not think that interest rate hikes have led to economic recession. The 2%inflation determined by the Federal Reserve has not been reached, and it needs to raise interest rates.The Fed considers Paul Walker as an example, which means that the Fed will not compromise with the market.
Several factors that stimulate economic growth such as industrial policy
When the above discussion of decline and interest rate hikes, the US government's financial policy that has expanded due to industrial policies has been regarded as an important variable of economic and economic policies. Huge subsidies and tax reductions are also the driving force for economic growth.The three major industrial policy bills signed and implemented by US President Biden: The reduction of the inflation bill chip and the scientific bill and infrastructure and employment bills are strong hearts injected into the US economy.These three bill represent the revolutionary changes in the US industrial policy.Although there is still a long way to implement these three major bills and have actual effects, the economic stimulus generated by these three major bills is obvious.
Infrastructure and Employment Acts involved investment funds of up to 550 billion US dollars (S $ 737.8 billion), and will be used for the construction of the United States' roads and bridges, water infrastructure, restoration power, and Internet.In 2022, the funds raised by the inflation reduction bill were US $ 738 billion for energy and climate change, medical bill subsidies, and tax reform.The total appropriation of the chip and the science bill totaled US $ 39 billion to invest in the construction of a domestic semiconductor production line in the United States, with US $ 13 billion for R & D and improvement of labor quality.
The scale of funds driven by the three major bills is expected to reach 3.8 trillion US dollars.In the field of semiconductors, several semiconductor giants invest in the United States to invest in factories in the United States. TSMC invests in a factory in Phoenix City, Arizona; Intel is invested in a factory in the outskirts of Columbus, Ohio;Factory in Taylor City (near Austin); a factory of US $ 30 billion in Dezhou Instruments investing in Sherman (near Dallas), Texas.Such a huge investment in injection economy will promote economic growth.
The Russian conflict has stimulated the production of the US arms industry to open up its horsepower production, which has also become a factor that stimulate economic growth.Taking the Haimas Rocket launch system as an example, Haimas is a product of Lockheed. A set of Hamas costs $ 5.52 million and a rocket price of nearly $ 100,000. This is not the export price.The U.S. government purchased Haimas for $ 631 million in Lockheed.Lockheed's employees originally worked for four days a week, and now they start to work extra overtime and hire 200 employees.
Several incidents convey good news to prevent recession
The important indicator of observing the US economy is personal consumption expenditure.In January 2023, the US personal expenditure increased by 1.8%month -on -month, and a 0.1%rebound from the downward amendment in December last year exceeded the market forecast of 1.3%.This is the largest increase since March 2021, marking that consumer spending has grown strongly on the basis of this year.The initial value of the consumer confidence index in February of the University of Michigan increased from 64.9 in January to 66.4, exceeding the average expected 65.1 economists surveyed by the Wall Street Journal.
On March 10, the U.S. Department of Labor announced in February increased by 311,000 jobs, an increase of more than 225,000 expected economists.At the same time, the unemployment rate rose from 3.4%to 3.6%, but this is because more people have joined the labor force and are looking for work.The highest level since March 2020.
Silicon Valley bank closure incident is related to the Federal Reserve's interest rate hike. If it is not for the Fed's interest rate hike, Silicon Valley Bank sells bonds at normal prices, and it is likely to raise enough funds to cope with crowding to avoid closure.This incident is different from the financial crisis in 2008, and it is unlikely to cause a comprehensive financial turmoil.At present, the supervision of the US banking industry is very strict, and bank firewalls have been established.After the incident, the US supervisory official quickly took over the Silicon Valley Bank to control the spillover effect.The bank failure incident is equivalent to the steps that urge the Federal Reserve to slow down interest rate hikes. The Fed may give up the interest rate hike at the meeting on March 22.This is a good thing to prevent the decline of the economy.
Economic prediction is a long -established joke
Humans are not good at predicting the economic growth rate of a specific country.British economists have retained a database predicted by GDP, and now there are more than 100,000 copies.Economists have found that analysts often have 0.4 percentage points, 0.8 percentage points and 1.3 percentage points in the predictions of one quarter, one -year, and two years, respectively.Economists have also found that the accuracy of the predictor was the lowest before the economic recession came.The easiest explanation is that economic predictions are difficult. People have not well -known knowledge about economic prediction.It is not possible to accurately measure all variables, nor can it predict the sudden changes in political or technical changes.
Economists cannot tell you when the next economic recession is coming.At the beginning of the US economy in 2001, professional predictions predict that the actual GDP in the United States will increase by 2.5%the following year, and the actual output has almost no increase.Most economists believe that the commercial cycle fluctuations, contraction, and expansion of the economic output are driven by an unpredictable impact or error.A pure random event and economic force interaction brought challenges to macroeconomic predictors, and random events themselves are unpredictable.However, the market requires economic predictions and a predictability. Therefore, the rice bowl of economic predictions will not be lost.
Entrepreneur decision -making does not rely on the forecast of economists, but is based on individuals' imagination, perception and judgment of market prospects, technical prospects, and resource acquisition.As long as the entrepreneur is not dead, a society's economy will always grow.
