After Democrats promised a “return to normalcy” with a Biden presidency, the Atlanta Federal Reserve is warning Americans that at least as to the economy, not so fast.
The Atlanta Fed’s Q3 GDP forecast/nowcast started out at 6.3% back in early August. Here in mid-October, we’re close to ZERO. In just two and a half months, Biden’s policies have eliminated any prospects for economic growth. Is this guy a genius or what?https://t.co/Bgld5I0BeN pic.twitter.com/oj2eCwv8AK
— Joseph Toomey (@JosephEToomey) October 19, 2021
Reserve bank economists who track GDP in real time are warning that the economy is close to falling into a recessionary trend, at least in the current third quarter, with GDP estimates under 1% for the quarter.
“The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2021 is 0.5 percent on October 19, down from 1.2 percent on October 15,” said the new Fed estimate.
The plunge has been precipitated by a decline in personal consumption expenditure growth (from 10.6% to less than 1%) and in real gross private domestic investment growth (from 8.4% to also less than 1%) for the third quarter.
On the eve of Joe Biden’s swearing-in as president economists at Goldman Sachs forecast U.S. GDP growth at 6.6% for 2021, including 9% GDP growth in the current third quarter.
Biden promised to have the country back to normal by the Fourth of July.
“After this long, hard year, that will make this Independence Day something truly special, where we will not only mark our independence as a nation, but will begin to mark our independence from this virus,” the president said according to US News.
But with one week declines in GDP forecasts plunging from 1.2% to 0.5%, the economy is closer to recession than it is to growth.
Added to concerns about economic growth, are inflation concerns which have left people worried about the return of “stagflation” where the economy doesn’t grow, but prices continue to go higher—a condition that hasn’t been seen since the Jimmy Carter era.
“A hot vax summer risks drifting into a winter of discontent” said Bloomberg economists Bjorn Van Roye and Tom Orlik. “With millions still out of work and elevated inflation, central banks are facing stagflation-lite.”