The American economy has actually slipped into a recession with the start of the fall of 2021, and it could be one that’s as devastating as the 2008 financial crisis, two economics professors have concluded based on their interpretation of key consumer data.
Two crucial consumer indices
Economists David Blanchflower of Dartmouth College and Alex Bryson of University College London are basing their conclusion on the current major drop in two consumer indices, those of the Conference Board and the University of Michigan.
The indices are formed using questions posed to ordinary Americans about their employment conditions, income expectations, and expectations for the American economy in the near future.
The two economics professors say that every recession in the United States since the 1980s has been predated by a 10-point decline in both of those measurements.
And right now, The Conference Board Index has seen a 25.3-point decline in 2021, and the UM Index has slumped by 18.4 points.
Back in 2008, ahead of the global financial crisis, the declines of the two indices were by 19 points and by 21 points, respectively.
In a new research paper, Blanchflower and Bryson state that in their view there is “every likelihood” that the American economy “entered recession” in the final quarter of 2021.
And why wouldn’t it, given the “shrewd” leadership of the wokeist-Marxist-Leninist administration of formerly Sleepy Joe, and now Empty Shelves Joe Biden?
The two economics scholars emphasize the importance of the indices they cite for the understanding of the condition of the US economy as those measurements offer real-time information about the situation “on the street.”
They favor those measurements, as they note that figures about GDP growth typically lag behind by almost a year, while furlough schemes skew the reliability of unemployment numbers.
‘Unprecedented government intervention’
Blanchflower and Bryson describe the 2021 economic situation as “exceptional” due to the “unprecedented direct government intervention” with respect to the labor market in which furlough schemes enabled a swift recovery from the 2020 downturn.
Thus, even though wage growth and unemployment data may suggest otherwise, their own rule of the “10-point declines” of consumer indices, shows that the American “Biden” economy is entering recession just as the present article is being drafted.
The two authors also note that COVID-19 fears are continuing to hurt economic growth as workers are scared of catching the coronavirus from their workplace or during the commutes.
Blanchflower and Bryson conclude that it is possible that the consumer indices data are giving false pointers – but they remind that it was fatal that in 2007 most policymakers and economists missed the declines in those variables.
Considering the sheer cluelessness and incompetence of the Empty Shelves Joe and his wokeist gang, who already messed up the supply chains and shot up inflation, it would be no surprise if the two economists are, unfortunately, totally right.