WHO 13 — For the majority of 2023 economists have predicted the U.S. was on track for a recession. Ernie Goss, an economist with Creighton University, says it will likely happen very soon.
“There is an increasing probability of a recession beginning as early as the last months of the fourth quarter, that would be November and December of this year, or in the first quarter of 2024 where the probabilities are rising above fifty percent in the first quarter in my estimation,” Goss said.
A tidal wave of factors is ready to crash, according to Goss. Oil prices at $90-$100 per barrel, inflation and high interest rates are putting significant strain on the banking industry causing banks to loan fewer dollars at the time people typically need them. Many people are staying in their homes longer, clinging to what once were historically low interest rates and consumer credit card debt is at the highest levels on record. But, Goss said there will be something different about the next economic downturn.
“It’s not going to be like 2008 and 2009 when the banking and housing sectors blew up, metaphorically. What we’re going to see is it’s going to come out a little bit at the time like a balloon losing air, not like a balloon bursting. So, that’s what we‘re gonna see this time; simply because banks have taken more precautions in terms of lending.”
Goss also said the agriculture sector is likely to weather the impending downturn the best. Farmland values are the highest they’ve ever been, primarily in northern Iowa and most farmers or owners of farmland have stayed cautious in making new investments.
The final indicator will likely happen after December retail numbers are reported.
“I expect this holiday season will not be robust. We’re going to see far less spending than we’ve typically seen in past years,” Goss said.