Area Economist Thinks U.S. Can Skirt Recession

By

Investor analyze stock chart, Businesswoman forecast graph in Bearish downtrend, Inflation Effect,Economic Depression
Image via iStock.

While recession risks are uncomfortably high, there are good reasons to believe that a downturn can be avoided, writes Mark Zandi, chief economist of Moody’s Analytics in West Chester, for The Philadelphia Inquirer.

The first among them is the healthy finances of a typical American household. Even with the pandemic and the war in Ukraine, the nation boasts low unemployment. Also, layoffs are at some of their lowest levels and people who do lose their jobs can quickly find new ones. Most households saved a lot during the pandemic and have also been able to manage their debts.

The share of household incomes going toward principal and interest payments is near a record low. Mortgage refinancing options over the years allowed households to pay off higher-cost credit card debt with long-term mortgages.

U.S. businesses are also in good financial shape, with many companies reporting close to record profit margins.

Banks are also on strong financial ground. Thanks to new regulations that followed the financial crisis more than a decade ago, there is neither too much nor too little credit.

Additionally, state and local governments are in excellent financial shape and have plenty of rainy-day funds available.

Read more about the preparedness of the nation’s economy in The Philadelphia Inquirer.

Join Our Community

Never miss a Delaware County story!

"*" indicates required fields

Hidden
DT Yes
This field is for validation purposes and should be left unchanged.
Advertisement