Economists forecast 50% recession odds amid stark economic slowdown in 2024

Published

1 year ago

December 5, 2023

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The US economy is in for a sharp slowdown in 2024 as a closely watched survey of top economists foresees stubbornly high inflation, a rise in unemployment and a 50% chance of recession.

A slew of headwinds will slow the current quarter’s Gross Domestic Product — a comprehensive measure of economic activity and performance — to a pace of 1.2%, according to the National Association for Business Economics’ latest Outlook Survey released on Monday.

That’s versus a 5.2% annualized rate during the third quarter, the Commerce Department reported — the fastest rate of expansion since the end of 2021. Adjusted for inflation, real GDP increased 2.1%.

Panelists foresee the GDP slowing even further, to 1%, between the fourth quarter of 2023 and the fourth quarter of 2024, NABE President and Morgan Stanley chief economist Ellen Zentner said in the survey, which was earlier reported on by Fox Business.

On the heels of the dismal data, of the 30-plus economists surveyed, one in four said they’re now forecasting a recession, assigning a probability of at least 50%, NABE reported.

The last time the US experienced a financial crisis was in 2008. At the time, of the economic downturn, the federal funds rate was 5.25% while inflation rose 4.1% on an annual basis, per the Consumer Price Index.

Now, inflation isn’t slowing as quickly as the Fed has hoped, and remains well above central bankers’ goal at 3.2%. That’s a trend that will likely remain entrenched during the coming year, according to the survey.

“Panelists anticipate further slowing in core inflation — excluding food and energy costs — but doubt it will reach the Federal Reserve Boards 2% target before year-end 2024,” said NABE Outlook Survey Chair Mervin Jebaraj, director of the Center for Business and Economic Research at the University of Arkansas.

Meanwhile, the Bureau of Labor Statistics last month released a weaker-than-expected October jobs report, when the economy only added 150,000 positions — as the unemployment rate came in above the Fed’s 3.8% year-end forecast, at 3.9%.

When November job data comes out on Friday, employers are expected to have added 180,000 positions, while unemployment is expected to hold at 3.9%.

The Federal Reserve Bank of Atlantas GDPNow forecasting model attributed the impending economic slowdown to a decline in construction spending and manufacturing as labor costs have surged and productivity has waned.

In New York, construction has been hindered by the precipitous 421a property tax exemption, which was given to real estate developers building new multifamily residential housing buildings in New York City before it expired in June 2022.

A lack of 421a, coupled with high borrowing rates, have pumped the brakes on new development.

An economic slowdown is also likely on the horizon as Taylor Swift’s blockbuster concert, “Eras Tour,” leaves the US.

Since Swift’s three-hour show kicked off in March in Arizona, loyal Swifties have shelled out so much for tickets and hotel rooms that the show has spurred growth in the economy of each of the cities its stopped at.

In Pittsburgh, an estimated 24,000 hotel rooms were booked at premium prices by fans making the Eras Tour pilgrimage back in June for the three-hour set, while tourists drummed up more traffic than usual for local businesses, from parking garages to restaurants.

While Swift’s concert continues its 100-plus-city trot around the globe, Beyonce’s “Renaissance” concert has also drawn a slew of fanfare as its embarked on a 56-stop world tour.

The economy will surely miss the so-called “Taylor Swift effect” after the 33-year-old songstress returns stateside to take her final Eras Tour bow in Indianapolis, Ind., in November 2024.

Beyonce, meanwhile, concluded her Renaissance tour on Oct. 1 in Kansas City, Mo.

UK

Eight arrests in connection with two separate terrorism investigations

Published

10 mins ago

May 4, 2025

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Eight arrests in connection with two separate terrorism investigations

Eight men have been arrested by the Metropolitan Police in two unconnected terrorism investigations.

In one operation on Saturday, counter-terror officers arrested five men, four of whom are Iranian nationals. All are in police custody.

The Met said the arrests related to a “suspected plot to target a specific premises”.

In an update shortly after midnight, the force said: “Officers have been in contact with the affected site to make them aware and provide relevant advice and support, but for operational reasons, we are not able to provide further information at this time.”

It added officers were carrying out searches at a number of addresses in the Greater Manchester, London and Swindon areas in connection with the investigation.

It said those detained were:

• A 29-year-old man arrested in the Swindon area
• A 46-year-old man arrested in west London
• A 29-year-old man arrested in the Stockport area
• A 40-year-old man arrested in the Rochdale area
• A man whose age was not confirmed arrested in the Manchester area.

Commander Dominic Murphy, head of the Met’s Counter Terrorism Command, said: “This is a fast-moving investigation and we are working closely with those at the affected site to keep them updated.

“The investigation is still in its early stages and we are exploring various lines of enquiry to establish any potential motivation as well as to identify whether there may be any further risk to the public linked to this matter.

“We understand the public may be concerned and as always, I would ask them to remain vigilant and if they see or hear anything that concerns them, then to contact us.

“We are working closely with local officers in the areas where we have made arrests today and I’d like to thank police colleagues around the country for their ongoing support.”

Terror arrests in separate investigation

Police also arrested three further Iranian nationals in London on Saturday as part of another, unrelated counter terror investigation.

The suspects were detained under section 27 of the National Security Act 2023, which allows police to arrest those suspected of being “involved in foreign power threat activity”.

Home secretary Yvette Cooper said in a statement: “I want to thank the police and our security services for the action they have taken to keep our country safe.

“Protecting national security is the first duty of government and our police and security services have our strong support in their vital work.”

She added: “These are serious events that demonstrate the ongoing requirement to adapt our response to national security threats.”

Politics

Pro-crypto Democrats pull support for stablecoin bill in last minute

Published

56 mins ago

May 4, 2025

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Pro-crypto Democrats pull support for stablecoin bill in last minute

A group of US Senate Democrats known for supporting the crypto industry have said they would oppose a Republican-led stablecoin bill if it moves forward in its current form.

The move threatens to stall legislation that could establish the first US regulatory framework for stablecoins, according to a May 3 report from Politico.

Per the report, nine Senate Democrats said in a joint statement that the bill “still has numerous issues that must be addressed.” They warned they would not support a procedural vote to advance the legislation unless changes are made.

Among the signatories were Senators Ruben Gallego, Mark Warner, Lisa Blunt Rochester and Andy Kim — all of whom had previously backed the bill when it passed through the Senate Banking Committee in March.

The bill, introduced by Senator Bill Hagerty, is formally known as the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.

Senate prepares to vote on stablecoin bill

The Senate is expected to begin floor consideration of the bill in the coming days, with the first vote potentially taking place next week.

The bill has been championed by the crypto industry as a landmark step toward regulatory clarity. However, the Democrats’ about-face reflects growing unease within the party.

Although revisions were made to the bill after its committee approval to address Democratic concerns, the lawmakers said the changes fell short. They called for stronger safeguards related to Anti-Money Laundering, national security, foreign issuers, and accountability measures for noncompliant actors.

The statement was also signed by Senators Raphael Warnock, Catherine Cortez Masto, Ben Ray Luján, John Hickenlooper and Adam Schiff.

Senator Kirsten Gillibrand and Senator Angela Alsobrooks were absent from the list, who co-sponsored the bill alongside Hagerty.

Despite their objections, the Democratic senators emphasized their commitment to shaping responsible crypto regulation. They reportedly said they “are eager to continue working with our colleagues to address these issues.”

Crypto needs a stablecoin bill

On April 27, Caitlin Long, founder and CEO of Custodia Bank, criticized the US Federal Reserve for quietly maintaining a key anti-crypto policy that favors big-bank-issued stablecoins, despite relaxing crypto partnership rules for banks.

Long explained that while the Fed recently rescinded four prior crypto guidelines, a Jan. 27, 2023, statement was left intact in coordination with the Biden administration.

The guidance, according to Long, blocks banks from engaging directly with crypto assets and prohibits them from issuing stablecoins on permissionless blockchains.

However, Long noted that once a federal stablecoin bill becomes law, it could override the Fed’s stance. “Congress should hurry up,” she urged.

Magazine: Financial nihilism in crypto is over — It’s time to dream big again

UK

Pictured: Boy killed in Gateshead industrial estate fire – 14 children arrested on suspicion of manslaughter

Published

2 hours ago

May 4, 2025

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Pictured: Boy killed in Gateshead industrial estate fire - 14 children arrested on suspicion of manslaughter

Tributes have been paid to 14-year-old Layton Carr who died in a fire at an industrial estate.

Eleven boys and three girls, aged between 11 and 14 years, have been arrested on suspicion of manslaughter after the incident in Gateshead on Friday. They remain in police custody.

Firefighters raced to Fairfield industrial park in the Bill Quay area shortly after 8pm, putting out the blaze a short time later.

Police then issued an appeal for a missing boy, Layton Carr, who was believed to be in the area at the time.

In a statement, the force said that “sadly, following searches, a body believed to be that of 14-year-old Layton Carr was located deceased inside the building”.

Layton’s next of kin have been informed and are being supported by specialist officers, police added.

A fundraising page on GoFundMe has been set up to help Layton’s mother pay for funeral costs.

Organiser Stephanie Simpson said: “The last thing Georgia needs to stress trying to pay for a funeral for her Boy Any donations will help thank you.”

One tribute in a Facebook post read: “Can’t believe I’m writing this my nephew RIP Layton 💔 forever 14 you’ll be a massive miss, thinking of my sister and 2 beautiful nieces right now.”

Another added: “My boy ❤️ my baby cousin, my Layton. Nothing will ever come close to the pain I feel right now. Forever 14. I’ll miss you sausage.”

A third said: “Rest in peace big lad such a beautiful soul taken far to soon my thoughts are with you Gee stay strong girl hear for u always.”

Detective Chief Inspector Louise Jenkins, of Northumbria Police, also said: “This is an extremely tragic incident where a boy has sadly lost his life.”

She added that the force’s “thoughts are with Layton’s family as they begin to attempt to process the loss of their loved one”.

They are working to establish “the full circumstances surrounding the incident” and officers will be in the area to “offer reassurance to the public”, she added.

A cordon remains in place at the site while police carry out enquiries.