The U.S. economy is back in the headlines, with more economists and financial experts warning of an impending downturn at some point in the next year. But what is a recession — and what happens during one?
(Bloomberg) — The global economy is making progress returning to its pre-pandemic growth trajectory, though supply challenges and quicker inflation continue to make for a bumpy recovery.
In the U.S., rising prices are weighing on sentiment and risk restraining the pace of consumer spending growth. China’s economy is already showing a hit from the surging delta variant of Covid-19 as consumers stay at home and airplanes idle on the tarmac.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
Even as risks loom from the delta variant of the coronavirus, early signs from the third quarter show global growth accelerating and inflation peaking after its recent jump, a reassuring sign for policy makers and investors worried about the risks of faltering demand and surging prices.
Supply constraints restraining the U.S. recovery show few signs of dissipating any time soon, weighing on growth and stoking inflation. Forecasters lowered economic growth projections for this year and lifted inflation expectations into 2022, according to Bloomberg’s latest monthly survey of economists.
Consumer sentiment fell in early August to the lowest level in nearly a decade as Americans grew more concerned about the economy’s prospects, inflation and the recent surge in coronavirus cases. The slump in confidence risks a more pronounced slowing in economic growth in coming months should consumers rein in spending.
Britain’s foreign-born population has doubled to 9 million people in the last decade, stirring a debate about immigration and social cohesion, a research group’s analysis shows.
The U.K. economy grew more than expected in June as lighter coronavirus restrictions led to renewed strength in nation’s dominant services.
Investor confidence in Germany’s recovery dropped to the lowest level since late last year after a rise in infection rates stoked concerns over a possible tightening of pandemic curbs.
China’s economic risks are building in the second half of the year, with growth set to slow while inflation pressures are picking up, clouding the outlook for central bank support. A report Monday showed factory-gate inflation surging again to 9% in July as commodity prices climbed, while core consumer prices — which strip out volatile food and fuel costs — rose the most in 18 months.
Taiwan’s exporters are on a tear, with strong demand for electronics and rising prices boosting shipments. Exports already hit a record in 2020, and they’re on track to exceed that well before the end of 2021.
Central banks in Latin America continued to raise borrowing costs this week to fight inflation, with Mexico raising interest rates for a second consecutive meeting and Peru and Uruguay also hiking.
©2021 Bloomberg L.P.
What is a recession? Your economy questions, answered. – The Washington Post
The answers can be complicated and vague.
“Recessions are notoriously hard to predict in advance,” said Tara Sinclair, an economics professor at George Washington University. “It’s pretty easy to say a recession is coming at some point in the future. … It’s much harder to quantify exactly when, how long and how deep.”
For nearly two years, the U.S. economy has notched blockbuster gains, with millions of new jobs and wage hikes adding to the streak of good news. Families and businesses were flush with cash, which they used to buy houses, cars, electronics and other big-ticket items. That extra spending — combined with lingering supply chain shortages and delays from the pandemic — helped drive up prices and contributed to the highest inflation in 40 years.
Now policymakers are trying to tackle some of those skyrocketing prices with higher interest rates. They’re hoping that by making it more expensive for families and businesses to borrow — for investments, homes and cars, for example — that demand for those things will go down. The question is whether they will be able to slow things down just enough, without sending the country into a recession.
Here, we answer some common questions on economic downturns and how they affect Americans.
Ontario premier Ford vows to rebuild economy, unveils new Cabinet – Reuters.com
OTTAWA, June 24 (Reuters) – Doug Ford took the oath of office for a second term as the premier of Canada’s most populous province on Friday with a promise to build highways and homes, and rebuild Ontario’s economy.
Ford’s right-leaning Progressive Conservatives returned to power with a sweeping victory in a provincial election on June 2, winning 83 seats in the 124-seat legislature.
He unveiled a larger 30-member Cabinet, moving former solicitor general Sylvia Jones to role of minister of health and deputy premier, while keeping Peter Bethlenfalvy in post as the debt-laden province’s finance minister.
Ford said he had an “ambitious plan” for his second stint, as his government faced challenges posed by inflation rates hitting a nearly 40-year high in Canada.
“That plan starts with rebuilding Ontario’s economy,” Ford said at his swearing-in ceremony.
He reiterated pledges made in the lead-up to the election, including new spending on highways, transit and the auto sector.
“We’re investing to connect every part of our auto supply chain … the cars of the future will be built right here, Ontario, from start to finish,” Ford said.
Ontario, home to just under 40% of Canada’s 38.2 million people, is Canada’s manufacturing heartland. It is also one of the world’s largest sub-sovereign borrowers, with publicly held debt in excess of C$400 billion ($309.6 billion).
Ford also pledged to address soaring home prices in the province by building more affordable housing.
Canada’s national housing agency projects Ontario to be one of the worst affected by a housing shortage over the next decade. Provincial capital Toronto is already one of the most expensive cities to live in globally.
“Too many families are frozen out of the housing market … we need to build more attainable homes,” Ford said.
($1 = 1.2921 Canadian dollars)
(This story was refiled to fix typo in headline)
Reporting by Ismail Shakil in Ottawa
Our Standards: The Thomson Reuters Trust Principles.
Northern Shootout's return provides a big boost to Orillia's economy – CTV News Barrie
The return of an annual slo-pitch softball event marks the unofficial start of summer in Orillia.
The Northern Shootout is back for its 13 edition after a pandemic-driven hiatus.
The tournament consists of 78 men’s, women’s and co-ed teams from Ontario and Quebec and promises a big boost to the economy in the city.
“Especially after two years of pandemic restrictions,” said Mike Ladouceur, City of Orillia. “This helps our tourism recover, puts heads in beds, hotels are filled, restaurants filled, this is really the big event that begins our summer of events.”
Organizer Mike Borrelli said the tournament has grown to become one of the biggest in Canada.
“We’re pretty much at capacity for participants. We can’t accommodate anymore,” he added. “We’re using the other diamonds, we got all the diamonds in Orillia, and we’re using the Rama diamond, so if we had more diamonds, we could accommodate more teams.”
The owners of Adovo Pizza in Orillia say the increase in tourism has done wonders for their business this year.
This being the first big event of the season, they’re excited to welcome so many people into the city.
“Everyone has just been waiting to get out,” said Adam Zimmerman, co-owner. “Especially for sporting events and vendors, have a cold beer. There’s nothing wrong with it.”
The tournament culminates with an annual home run derby, which organizers said typically draws 1,200 fans to watch.
Sixteen participants will compete to walk away with a championship belt.
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