by Brittany Raymer
Former Digital Writer & Editor
CEOs from some of the nation’s top financial centers are now warning of an impending recession and economic downturn. How long and how difficult it could depend on the 2022 midterms, which could set the policy tone for the future of the country.
All the economic indicators make it clear that the United States is heading towards a recession if it’s not in one already. The people of North Carolina agree, with the last Civitas Poll results showing that 28.6% already believe that the country is in a recession and an additional 55.9% believe it’s likely. Inflation also remains frustratingly high, which putting additional pressures on family.
And if the government can’t reign in spending or raise the interest rate to an appropriate level, things are going to get worse before it gets better.
As one of the richest men in the world, Elon Musk was one of the first to raise the alarm about the dire economic forecasts. Though Tesla had a great third quarter, the revenue of $21.45 billion was still slightly lower than the $21.96 billion estimate from Refinitiv.
Musk blamed the rising costs of supplies.
Jamie Dimon, the CEO of JPMorgan Chase, believes that the U.S. will experience a recession by mid-2023.
“These are very, very serious things which I think are likely to push the U.S. and the world – I mean, Europe is already in a recession – and they’re likely to put the U.S. in some kind of recession six to nine months from now,” he said.
Goldman Sachs CEO David Solomon shared his thoughts on the country’s current economic crisis as well.
“I think you have to expect that there’s more volatility on the horizon now,” he said. “That doesn’t mean for sure that we have a really difficult economic scenario. But on the distribution of outcomes, there’s a good chance that we have a recession in the United States.”
Solomon also warned that it’s “time to be cautious” for risk-based businesses, which can include small businesses.
Thankfully, Raleigh’s small business community is doing well, with a recent survey showing that 90% are open, which is one of the highest rates in the country. But as recession creeps in, business owners and employees may pay the price. During the Great Recession, North Carolina reached an unemployment rate of 10.9%. It was higher than the previous high of 9.3%, though not as high as the pandemic unemployment rate of 14.2%, which is also notably temporary.
Given that the state is still recovering from the forced pandemic shutdowns, another economic downturn would stress businesses and potentially lead to layoffs.
But minimizing the damage all depends on what the Biden administration does and if the government can reign in its spending.
“In an environment where inflation is more embedded and growth is slower, asset appreciation will be tougher,” Solomon said. “Are we going to get rooted in that kind of a decade-long scenario? I don’t know. The policy decisions we make from here will have an impact.”
That’s why this election is critical. Voting is one way that Americans can impact the economy at the national level. A potential shift in power could help mitigate or manage the fallout of the nation’s blowout spending at the beginning of the pandemic.
Early Voting has now opened in North Carolina and ends on November 5 at 3 pm.