Our economy sits in a strange position, as experts are showing that the country shows signs of healing from a recession…that we haven’t actually entered. Economists across the country believe that we are likely to fall into a recession in the next year, however they have been saying this for the last three years. Dr. Ernie Goss, Professor of Economics at Creighton University, discusses his theories in his monthly newsletter on economic trends across the country.

Dr. Goss believes the odds of us falling into a recession in 2024 is 70%. Between suddenly having over 40 million people suddenly having to pay back their student loans for the first time in three years, credit card debt rising by 4.5% in the first half of 2023, and that home sales have fallen nearly 13% in the last year have all had negative effects on the economy.

The Federal Reserve has been raising short-term interest rates above long-term interest rates, creating what is called a negative, or inverted, yield curve. Yield curves are used to show what the market can be expected to do in terms of interest, as short and long-term usually are connected. An inverted yield curve is almost always a prelude to a recession, and has been one of the preceding factors in our country’s recessions since the 1950’s. 

Part of why the United States has managed to hold off on a legitimate recession, despite the Pandemic, was that the Federal Reserve has been adding money into circulation, however as they are moving to pull it back by 3%, it is likely to have a rebound effect. There has also been increased spending on the part of both consumers and the government, which always has a positive effect on the market. The US has added over one million jobs in 2023 so far, and it is currently looking like the GDP will grow by 4.9%.

Dr. Goss believes that end of this year to early next year will be when we start seeing signs of an economic downturn and the beginning of an official recession.

If you are interested in learning more, you can sign up for Dr. Goss’s monthly newsletter by going to his website at gossandassociates.com.