Earnings Recession in 2023 to Transition to Strong Recovery in 2024. Morgan Stanley Research strategists think U.S. corporate earnings could decline 16% in 2023 but stage a comeback in 2024 and 2025. Here's what's behind the forecast.
By April 2024, it is projected that there is probability of 68.22 percent that the United States will fall into another economic recession. This is an increase from the projection of the preceding month where the probability peaked at 57.77 percent.
Australia is moving closer towards a recession and its chances of experiencing one in the next year is sitting at around 50 per cent, according to economists.
Economic experts are once again ringing the alarm bells over an imminent downturn. A US recession is coming, they say, in the second half of 2023. That time frame begins less than three weeks from now.
If Australia enters a recession, many people will have a tough time, whether through job loss, home loss, or even just a struggle to pay the bills. Whole markets will tank or lose significant value and many businesses will likely go bankrupt.
Australia may continue to be the lucky country and avoid a recession in 2023, but its global peers may not be so fortunate. Chief economist at Australian Retirement Trust Brian Parker says that Australia is relatively well placed to handle the economic turmoil.
Although Australia has avoided the worst effects of a recession for almost 30 years, 2023 may be the year of a recession - if one thing keeps rising. With GDP on an upward trajectory, a 0.6 per cent uptick to be precise, and unemployment at an all-time low at 3.5 per cent - we're in a good economic situation.
Geopolitical tensions, energy market imbalances, persistently high inflation and rising interest rates have many investors and economists concerned that a U.S. recession is inevitable in 2023. The risk of a recession rose as the Federal Reserve raised interest rates in its ongoing battle against inflation.
A majority of economists forecast a recession for the U.S. in 2023 – 58 percent, according to a survey from the National Association for Business Economics (NABE) released earlier this week on March 27.
Tim Simons, a money market economist at Jefferies, thinks that 2023 will see a “classic recession.” He predicts that the downturn will begin at the corporate level in the first half of 2023, leading to reduced headcounts. By mid-2023, he predicts that economic growth will slow and inflation will begin to dissipate.
How close is Australia to a recession? In GDP growth terms, Australia's economy is slowing, with growth dropping to 0.2% in the March quarter after two quarters of 0.6%. When population growth is added, per-capita GDP shrank by 0.2% in the first three months of 2023 after two quarters of just 0.1% growth.
COVID-19, climate change, and global supply chain issues have each driven up the cost of living in Australia.
In mid 2022, the panel assigned a 20% probability of recession in the next two years, but by February of this year that figure had grown to 26%. Most recently, the IMF downgraded growth forecasts for Australia from 1.9% in 2023 to a more timid 1.6%.
Following the 2024 recession, the economy is slated to improve, with rising trends anticipated for US GDP, US Industrial Production, and many individual industries and markets in 2025. This should continue through the rest of the 2020s, with the US economy rising at various rates during that time.
In general, a recession lasts anywhere from six to 18 months. For example, the Great Recession that started in December 2007 lasted 18 months. But the recession prompted by the pandemic in 2020 only lasted two months.
“However, this downturn will be relatively mild and brief, and growth should rebound in 2024 as inflation ebbs further and the Fed begins to loosen monetary policy.”
Officials say 'mild recession' likely in 2023.
Preparing for a recession comes down to using strong economic times to your benefit. Focus on limiting your spending, forming a budget, building an emergency fund and eliminating high-interest debts.
Interest rates typically fall once the economy is in a recession, as the Fed attempts to spur growth. Refinancing debt and making more significant purchases are ways to take advantage of lower interest rates.
Key Points. Australia's GDP is expected to grow by 1.6 per cent in 2023, followed by 1.7 per cent in 2024. Despite the bleak outlook, Treasurer Jim Chalmers is confident Australia will avoid a recession. The state of Australia's economy depends largely on the RBA's cash rate decisions.
Prices could fall further
If you buy in a recession, there is always the risk that prices could fall even further. That said, Australian property prices usually tend to rise in the long run, especially in capital cities. So if you're prepared to spend some time owning your property, you're likely to come out ahead.
There are many factors that have driven Australia's strong period of growth since the last recession in 1991, including strong population growth, robust export growth and balanced growth across industries.