Recession looming large on US economy? What growth rate has been predicted by Fed Reserve body? Everything you may like to know

Do you remember the Great Depression that began in the US in 1929 and remained there till 1939 and affected many countries across the world? Though it may not reach to that devastating level, a recession is looming large on the US economy. According to 'Fox Business', BCA Research Chief Global Strategist Peter Berezin has warned of a recession either this year or in early 2025. He has also apprehended rising unemployment, a stock market meltdown, widespread economic pain, and growth slowing sharply in Europe and China.

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What Is a Recession?

Analysts and economists consider two consecutive quarters of contracting the Gross Domestic Product or the GDP to be a recession. The National Bureau of Economic Research has defined recession as a significant decline in economic activity that is spread across the economy and that lasts more than a few months.

1% economic growth predicted

Fed Reserve's policymaking body Federal Open Market Committee in June projected just one percent economic growth for the financial year 2024-25. The Fed Reserve has raised interest rates four times in 2023. According to FactSet, S&P 500 companies are expected to register a 0.4% year-over-year growth during the third quarter of the current financial year.

Slow rise in Inflation

According to Forbes, at least one warning sign of a U.S. recession has been very clear since 2022. The yield on the 2-year U.S. Treasury note is above the yield on the 10-year Treasury. The state of employment is not rosy either. The U.S. unemployment rate remains historically low at just 3.8%. The news outlet has reported that the consumer price index, registered a growth of just 0.4% monthly in September, it went up only 0.6% in August.

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FAQs:

What is the projected growth rate for the financial year 2024-25?
Fed Reserve's policymaking body Federal Open Market Committee in June projected just one percent economic growth for the financial year 2024-25. The Fed Reserve has raised interest rates four times in 2023.

What is a recession?
Two consecutive quarters of contracting the Gross Domestic Product or the GDP is said to be a recession. The National Bureau of Economic Research has defined recession as a significant decline in economic activity that is spread across the economy and that lasts more than a few months.