Model Puts Chance of Recession at 100%

Projection clashes with Biden's reassurances
By Bob Cronin,  Newser Staff
Posted Oct 17, 2022 7:35 PM CDT
Recession Is Certain to Occur, Model Shows
President Biden walks toward the Oval Office after arriving on the South Lawn of the White House on Monday.   (AP Photo/Evan Vucci)

A new economic projection contradicts President Biden's hopeful forecast of a minor recession, at worst, ahead for the nation. A Bloomberg Economics model shows the likelihood of a recession beginning at some point before October 2023 at 100%. Until now, the model had the chance of a recession at 65%, Bloomberg reports. With the midterm elections less than a month away, Biden dismissed a downturn as unlikely in a CNN interview last week. "I don't think there will be a recession," the president said, per CNBC. "If it is, it'll be a very slight recession."

Other forecasts, including Bloomberg's, have been less certain. An unrelated Boomberg survey of 42 economists found the likelihood of a recession in the next 12 months has risen 10 points in the past month, to 60%. The change in the forecast was attributed to widespread worsening among the data used as the model's inputs. The model uses 13 macroeconomic and financial indicators in predicting the chance of a recession occurring at points from one month to two years from now. More generally, Bloomberg attributed the growing chances of a downturn to inflation and concern that the Federal Reserve will keep raising interest rates. (More recession stories.)

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