Goldman Sachs economists have downgraded their forecast for U.S. economic growth in 2022. They now see little to no growth during the first three months of the year. They also said the chance of a recession in the U.S. over the next year has risen as high as 35%. But Treasury Secretary Janet Yellen doesn’t agree. In fact, she said she doesn’t expect a recession in the U.S. However, on Thursday, she said Americans will likely see another year of “very uncomfortably high” inflation. She told CNBC that Russia’s invasion of Ukraine made her previous prediction that price growth would slow down in the months to come a little more complicated.
CNN Business/Julia Horowitz
Risk of a US recession as high as 35%, Goldman Sachs says
Europe’s reliance on energy from Russia has jacked up the odds that the region could enter a recession this year as soaring inflation pushes people to cut back spending. The United States is more insulated from the spike in oil and gas prices — but it’s not immune.
What’s happening: Goldman Sachs has downgraded its forecast for US economic growth in 2022. It now sees little to no growth during the first three months of the year.
Goldman’s economists, led by Jan Hatzius, said the chance of a recession in the United States over the next year has risen as high as 35%.
“Rising commodity prices will likely result in a drag on consumer spending, as households — and lower-income households in particular — are forced to spend a larger share of income on food and gas,” they told clients on Thursday.
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Treasury Secretary Janet Yellen says Americans will likely see another year of ‘very uncomfortably high’ inflation
Treasury Secretary Janet Yellen said Thursday that Americans will likely see another year of “very uncomfortably high” inflation as Russia’s invasion of Ukraine muddles her prior forecast that price acceleration would moderate in the months ahead.
“I think there’s a lot of uncertainty that is related to what’s going on with Russia in Ukraine,” Yellen told CNBC’s “Closing Bell.”
“And I do think that it’s exacerbating inflation. I don’t want to make a prediction exactly as to what’s going to happen in the second half of the year,” she continued. “We’re likely to see another year in which 12-month inflation numbers remain very uncomfortably high.”
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Fox Business/Jon Brown
Inflation costing average American household nearly $300 per month: report
Skyrocketing inflation rates are costing the average American household $296.45 in extra expenses, according to a recent analysis.
Ryan Sweet, a senior economist at Moody’s Analytics, came to the number following the latest Labor Department data revealing that consumer prices spiked 7.9% in February, according to the New York Post.
Sweet took the average spending of U.S. households in February and compared it to what would have been spent in 2018 and 2019, when inflation hovered at 2.1%.
“Unfortunately, things will get worse before they get better. Higher energy prices in March are going to boost the [Consumer Price Index],” Sweet told the New York Post.
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