Forecast of US Economy 2023

The Conference Board forecasts that economic weakness will intensify and spread more widely throughout the US economy over the coming months, leading to a recession starting in early 2023. This outlook is associated with persistent inflation and the Federal Reserve hawkishness. We forecast that real GDP growth will slow to 0.3 percent in 2023, and then rebound to 1.6 percent in 2024.

US GDP growth defied expectations in late 2022, but we expect persistently high inflation and rising interest rates to tip the economy into a brief and mild recession starting in Q1 2023. Real US consumer spending began to contract in the final months of 2022, and we expect this trend to continue over the coming quarters.

 Additionally, as the Federal Reserve continues to raise interest rates (we forecast two more 25 basis point hikes over the next two meetings) we expect nonresidential investment to turn negative and residential investment to continue to contract. Finally, volatility in trade and inventory data that boosted growth in Q4 2022 is unlikely to persist in Q1 2023 and will therefore push overall GDP lower.

Labor market tightness will moderate somewhat over the coming quarters but will remain elevated relative to previous economic downturns. This should prevent overall economic growth from slipping too deeply into contractionary territory and facilitate a rebound in late 2023. Inflation will continue to cool over the course of 2023 as well, but the Fed’s 2 percent inflation target will remain elusive. As such, the Federal Reserve will not cut interest rates until next year, in our view.

Looking to 2024, we expect the volatility that has dominated the US economy over the pandemic period to diminish. We forecast that overall growth will return to more stable pre-pandemic rates, inflation will drift closer to 2 percent, and the Fed will bring rates closer to 3 percent. However, due to demographic challenges we expect tightness in the labor market to remain an ongoing challenge for the foreseeable future.

Global Signs of Recession

New York - CNN Business — Around the world, markets are flashing warning signs that the global economy is teetering on a cliff’s edge.

The question of a recession is no longer if, but when.

Over the past week, the pulse of those flashing red lights quickened as markets grappled with the reality — once speculative, now certain — that the Federal Reserve will press on with its most aggressive monetary tightening campaign in decades to wring inflation from the US economy. 

Even if that means triggering a recession. And even if it comes at the expense of consumers and businesses far beyond US borders.

There’s now a 98% chance of a global recession, according to research firm Ned Davis, which brings some sobering historical credibility to the table. 

The firm’s recession probability reading has only been this high twice before — in 2008 and 2020.  READ MORE...

Unemployment Will Rise - Lost Jobs

The Federal Reserve escalated its fight against inflation this week, instituting a major rate increase and saying more will likely follow. The moves will cause a jump in the number of unemployed Americans by the end of next year, the central bank said.

The Fed has put forward a series of aggressive interest rate hikes in recent months as it tries to slash price increases by slowing the economy and choking off demand. But the approach risks tipping the United States into a recession and causing widespread joblessness.

Fed Chair Jerome Powell on Wednesday acknowledged that rate hikes would cause pain for the U.S. economy, as growth slows and unemployment rises. He added, however, that "a failure to restore price stability would mean far greater pain later on."

The job losses forecasted by the Fed this week would by the end of 2023 raise the unemployment rate from its current level of 3.7% to 4.4%. That outcome would add an estimated 1.2 million unemployed people, according to Omair Sharif, the founder of research firm Inflation Insights.  READ MORE...

RULE OF LAW - Part II

Three middle-aged wealthy men who were influenced by Great Britain wrote The Federal Papers describing the CORE VALUES of the American People, because these aristocrats did not believe that the common man did not have the ability to articulate something so intellectually important.  And, while that might be true, it is highly arrogant, egotistical, with an air of astronomical self-importance...

So, what are are American CORE VALUES?

• Highly Religious
• Hard Working
• Equality
• Family Oriented
• Community Oriented
• High Moral & Integrity
• Honesty & Fair Play

UNFORTUNATELY, these core values only pertained to the caucasian race that most immigrated from Europe.  Very few if any extend out into the black communities or other minorities.  And, most importantly, 80% of Americans no longer believe in any of these as their CORE VALUES...

Young American was comprised of Aristocrats who settled the north and provided us with our manufacturing base while the south was settled unorthodox aristocrats who relied on immigrants that had been released from European prisons.  This formed the North/South hatred that is still in existence today.

Since 1776, America has changed dramatically not only in its populations of immigrants but in how each ethnic group perseceives and tolerates other ethnic groups.

Blacks have made the overt decision to challenge America's RULE OF LAW by not following it as much as they are trying to destroy it...  Blacks have seen first hand that America's RULE OF LAW does not pertain to everyone equally and fairly which has caused much negative reflections in their various ethnic bands spread throughout the United States.

TODAY, our RULE OF LAW is shot to hell and for all intense and purposes does not exist at all except in the minds of our law makers on Capital Hill who continue to perceive that they are making laws that will benefit a majority of the people...  when in reality their bills and laws are highly partisan....  like this current movement to completely halt the use of petroleum crude oil...  

Their idiocy extends to closing down pipelines in the US/Canada that made us energy independent so that if we needed any additional oil, we would be forced to buy that our from our enemies making them wealthier than they were before...

NO RULE OF LAW HERE...

We have millions of immigrants crossing into our country along the southern border making each one that enters our RULE OF LAW country doing so by breaking the law...

How can anyone say that we have RULE OF LAW in the USA when illegal immigration is out of control?

NO RULE OF LAW HERE...

The Supreme Court of the US interprets the RULE OF LAW that the CONGRESS passes to determine if these laws align themselves with the guidelines in the US Constitution or not.  If these laws do not, they are deemed unconstitutional and can no longer be enforce.

The US Constitution makes it an illegal act for people to protest outside the homes of the Supreme Court Justices in an effort of intimidation to persuade them to vote a different way.

Today, there are hundreds of civil protestors in front of a few of the home of Supreme Court Justices trying to persuade them not to overturn Roe V Wade....

This is blatantly against the law and the current Department of Justice refuses to enforce the law and disperse the crowd.

NO RULE OF LAW HERE

Economic Inequality

June 5, 2022





By David Leonhardt

Good morning. We look at why economic inequality began soaring in the U.S. four decades ago.

Jack Welch before his retirement in 2001.Chester Higgins Jr./The New York Times

Net losses
If you look at historical data on the U.S. economy, you often notice that something changed in the late 1970s or early ’80s. Incomes started growing more slowly for most workers, and inequality surged.

David Gelles — a Times reporter who has been interviewing C.E.O.s for years — argues that corporate America helped cause these trends. Specifically, David points to Jack Welch, the leader of General Electric who became the model for many other executives. I spoke to David about these ideas, which are central to his new book on Welch (and to a Times story based on it).

How do you think corporate America has changed since the 1980s in ways that helped cause incomes to grow so slowly?

For decades after World War II, big American companies bent over backward to distribute their profits widely. In General Electric’s 1953 annual report, the company proudly talked about how much it was paying its workers, how its suppliers were benefiting and even how much it paid the government in taxes.

That changed with the ascendance of men like Jack Welch, who took over as chief executive of G.E. in 1981 and ran the company for the next two decades. Under Welch, G.E. unleashed a wave of mass layoffs and factory closures that other companies followed. The trend helped destabilize the American middle class. Profits began flowing not back to workers in the form of higher wages, but to big investors in the form of stock buybacks. And G.E. began doing everything it could to pay as little in taxes as possible.

You make clear that many other C.E.O.s came to see Welch as a model and emulated him. So why wasn’t there already a Jack Welch before Jack Welch, given the wealth and fame that flowed to him as a result of his tenure?

This was one of those moments when an exceptional individual at a critical moment really goes on to shape the world.

Welch was ferociously ambitious and competitive, with a ruthlessness that corporate America just hadn’t seen. In G.E., he had control of a large conglomerate with a history of setting the standards by which other companies operated. And Welch arrived at the moment that there was a reassessment of the role of business underway. The shift in thinking was captured by the economist Milton Friedman, who wrote in The Times Magazine that “the social responsibility of business is to increase its profits.”  

Was Welch’s approach good for corporate profits and bad for workers — or ultimately bad for the company, too? You lean toward the second answer, based on G.E.’s post-Welch struggles. Some other writers point out that many companies have thrived with Welch-like strategies. I’m left wondering whether Welchism is a zero-sum gain for shareholders or bad for everyone.

Welch transformed G.E. from an industrial company with a loyal employee base into a corporation that made much of its money from its finance division and had a much more transactional relationship with its workers. That served him well during his run as C.E.O., and G.E. did become the most valuable company in the world for a time.

But in the long run, that approach doomed G.E. to failure. The company underinvested in research and development, got hooked on buying other companies to fuel its growth, and its finance division was badly exposed when the financial crisis hit. Things began to unravel almost as soon as Welch retired, and G.E. announced last year it would break itself up.

Similar stories played out at dozens of other companies where Welch disciples tried to replicate his playbook, such as Home Depot and Albertsons. So while Welchism can increase profits in the short-term, the long-term consequences are almost always disastrous for workers, investors and the company itself.

Welch was responding to real problems at G.E. and the American economy in the 1970s and early ’80s. If his cure created even bigger problems, what might be a better alternative?

An important first step is rebalancing the distribution of the wealth that our biggest companies create. For the past 40-plus years we’ve been living in this era of shareholder primacy that Friedman and Welch unleashed. Meanwhile, the federal minimum wage remained low and is still just $7.25, and the gap between worker pay and productivity kept growing wider.

There are some tentative signs of change. The labor crisis and pressure from activists has led many companies to increase pay for frontline workers. Some companies, such as PayPal, are handing out stock to everyday employees.

But it’s going to take more than a few magnanimous C.E.O.s to fix these problems. And though I know it’s risky to place our faith in the government these days, there is a role for policy here: finding ways to get companies to pay a living wage, invest in their people and stop this race to the bottom with corporate taxes.

American companies can be competitive and profitable while also taking great care of their workers. They’ve been that way before, and I believe they can be that way again.

More about David Gelles: He was born in New York and got his first full-time job in journalism working for the Financial Times, where he interviewed Bernie Madoff in prison. His book about Welch is called “The Man Who Broke Capitalism.” He recently spoke about the media’s role in celebrating Welchism.

STEM Education Crisis in the USA

How does the US rank in STEM education?

From 2015 to 2018, US students improved their international standing, according to PISA. In 2015, tenth-grade students ranked 35th in math and 17th in science; in 2018, tenth-grade students ranked 30th in math and 11th in science. Despite that, actual scores have remained stagnant for over a decade, said ECE.Jan 3, 2020

What could be the apparent reason for the current state of STEM education in the US? And how are we going to address the issue? Here, we look at some of the hurdles and how we can tackle them.

Sean Mathew bailed out of his physics degree from one of the top colleges in the US in his senior year. He had been the kind of student that most employers would love to hire. His scores were excellent and he had planned to be a theoretical physicist like his role model Sheldon Cooper from the Big Bang Theory. But as Sean sat in his major class of 2016, he realized, he couldn’t relate his class theories to real-life problem solving skills. And when he looked at the curriculum, he didn’t see any respite. He was completely disillusioned.

So Sean, a 23-year-old, switched to international relations, where he says “classes are a lot more interesting”. Of his five friends at the college, two of them have followed in his footsteps. While the other two, who are still pursuing their course, plan to do business after they complete their degree.

Sean and his friends’ experience shows how some of the best performing students are getting disillusioned by the way engineering or STEM subjects are being taught in schools and colleges, where there is more focus on theory rather than in hands-on learning.

Their stories are not isolated. There are many like them who are switching to non-STEM subjects citing the same reason. According to the Bureau of Labor Statistics, by 2019 there will be a requirement of 1.9 million STEM educated professionals in the US, but roughly 40 percent of students, who intend to do a major in STEM, end up switching to other subjects.


STEM crisis in the US: Is it for real?
“Think about the America within our reach: A country that leads the world in educating its people. An America that attracts a new generation of high-tech manufacturing and high-paying jobs.” – Obama




During his tenure, Obama had pushed for STEM education and endorsed for more public-private partnerships, more career training at community colleges and for more American innovation. And now, carrying his predecessor’s legacy forward and recognizing the importance of STEM education in enhancing a new generation of American workers, President Donald Trump had recently signed a memorandum for STEM education funding.

It’s true that the educators, policy makers, politicians, businesses are waking up to the importance of STEM today, but we all know that our nation had always had a shortage of STEM workforce.

According to the third annual US News/Raytheon 2016 STEM Index, US continues to have a shortage of STEM professionals despite an increase in the number of STEM degrees. A Census Bureau report shows that about 74 percent of college graduates with STEM degrees are opting for non-STEM jobs starting from law to education and social work.

This is certainly a bad news for employers who want to fill STEM vacancies. According to the US Department of Commerce, STEM graduates are the most in demand and earn higher salaries than their non-STEM counterparts. The demand for STEM professionals is growing as the US economy has transitioned to a more focused technological-based economy from an industrial-dependent economy.  READ MORE...