The US has entered a recession that will persist into next year, and economies around the world will follow suit, according to a survey of business economists.
After growing 1.4 percent this year, the US will contract 0.2 percent next year, according to the median estimate in a poll taken by the National Association for Business Economics (NABE). A majority of respondents said the UK, euro area, Japan, Canada and Mexico are either now, or will soon be, in a recession.
“Business economists became decidedly more negative on the economic outlook for the next several quarters as a result of the intensification of credit-market stresses,” Chris Varvares, NABE president, said in a statement.
Pessimism about the outlook for stocks, construction, home prices and employment means household wealth and spending will keep weakening, the report said. Of all the measures undertaken so far to stem the slump, the US Treasury’s bank-capital injections and Federal Reserve support for the commercial paper market will prove the most effective, the economists said.
The jobless rate, now at a 14-year high of 6.5 percent, will climb to 7.5 percent by the end of next year, according to the median forecast.
Last month, the group anticipated it would peak at 6.4 percent by the middle of next year.
Auto sales, which the group last month projected would stabilize next year, are now forecast to keep sliding. Purchases will decline 6.7 percent next year after dropping 17 percent this year, the survey results showed.
Similarly, the economists said housing starts won’t bottom until next year. Builders will break ground on 870,000 homes next year, the fewest in 50 years of record-keeping. Property values are likely to fall another 3.5 percent next year after dropping 6 percent this year, the group said.
The outlook for home sales was less dire, with almost all respondents projecting purchases would reach a low by next June.
On a quarterly basis, the business economists projected the US would shrink at a 2.6 percent annual pace from last month to next month and at a 1.3 percent rate in the first three months of next year. The world’s largest economy would resume growing in the second quarter of next year, expanding at a 0.5 percent pace.
Fed policy makers are likely to hold the benchmark interest rate at 1 percent through the third quarter of next year, even as the outlook for growth dims and inflation is projected to cool, the survey showed.
Economists surveyed by Bloomberg News from Nov. 3 to Nov. 11 were more pessimistic about the US economy than the NABE group. The economy will probably contract 0.3 percent next year, prompting central bankers to lower the key rate to a record-low 0.5 percent by March, the Bloomberg survey showed.
The NABE poll was conducted from Oct. 28 to Nov. 7.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique