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Return to pandemic hunger levels could signal economic fragility



ATLANTA — As economists and investors scour data on inflation, jobs, housing, banking and other bellwether indicators to determine whether the United States is headed for a recession, a visit to the nation’s largest food-bank warehouse offers some ominous clues.

More than half of the shelves at the Atlanta Community Food Bank are bare, in part because of supply-chain issues, but mostly because demand for food assistance is as high as it was during the COVID-19 pandemic, the nonprofit’s executives said. They said two in five people seeking food assistance in the Atlanta region this year have not done so before.

“Nobody anticipated this,” said Debra Shoaf, chief financial officer of the private charity, which relies on corporate and individual donations, as well as government grants, to distribute food to the hungry in 29 Georgia counties. Shoaf, who also serves on the finance steering committee for the national charity Feeding America, says she’s hearing similar reports across the United States. “We’re back up to pandemic levels,” she said.

In some regions, demand is exceeding even the starkest days of the COVID pandemic. In central Ohio, the local food bank says the number of households seeking aid has increased by nearly half since last year.


More than 11.4 million households collected free groceries in early April, up 15% from a year ago, according to data from the Census Bureau.

“Food banks have been around for 50 years, but this is the first time we are seeing unprecedented high food demand combined with historically low unemployment rates,” said Vince Hall, chief government relations officer for Feeding America, which supports 60,000 food pantries.

The sustained demand comes as most government pandemic emergency aid ends – notably, temporary COVID-related increases to the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, a federal program that provides debit cards to directly purchase food at stores.

Inflation is a major factor, too: Grocery prices have increased 23% since March 2020, when the pandemic began, according to the U.S. Bureau of Labor Statistics.

Such post-COVID demand for free food is “not a good signal” for the economy “and perhaps an indicator of an impending recession,” said John Lowrey, a business professor at Northeastern University whose research focuses on food bank management and public health.

“The fact that we have a lot of first time users who are no longer concerned about the stigma of going to a food pantry – and actually see value in it because they can no longer afford retail food – is a reasonable proxy for the health of the economy and consumers,” Lowrey said.

Craig Gundersen, a Baylor University economics professor who is a prominent researcher for Feeding America, said that food banks experiencing spikes above COVID levels are outliers. It is not surprising, he said, to see an increase in demand this year because the government provided so much assistance during the pandemic emergency. He also noted that SNAP benefits, adjusted upward following a mandated review in 2021, remain higher now than they were four years ago.

“We had the stimulus checks, for a long time people didn’t have to pay their rents and unemployment benefits were higher than wages,” said Gundersen.

Michael McKee, CEO of the Blue Ridge Area Food Bank, which serves 25 counties astride the Appalachian Trail in Virginia, said COVID emergency assistance masked underlying economic realities. According to the latest available figures from the Bureau of Labor Statistics, inflation has outpaced wage gains since March 2020.

“What’s happening now reveals the scope, scale and pervasiveness of food insecurity in this country and the effects of inequality, not just more recently from inflation, but the inability of wages to keep up with the cost of living,” McKee said.


A complicating factor: the issue of government food assistance has become entangled in the debate among lawmakers about whether to raise the country’s borrowing limit.

Republicans in Congress have proposed limiting food assistance as part of a package of measures to combat what U.S. House Speaker Kevin McCarthy said was President Joe Biden’s “reckless spending.”

President Biden has slammed the Republican proposal and argued it would harm low-income Americans. Anti-hunger advocates told Reuters that policies that make it more difficult for people to access SNAP could put further strain on food banks and other emergency food providers.

The SNAP government program is by far the largest method of feeding the hungry in the United States. Food banks and pantries account for about a tenth as many meals distributed, but they are still the second-largest provider and therefore serve as a critical part of the social safety net.

As temporary COVID-era supplements to SNAP have ceased, food banks from Georgia to Colorado to Virginia say demand for their services has grown.

The Mid-Ohio Food Collective, which operates in 20 counties, reported a roughly 45% increase in household pantry visits in the first three months of this year, compared to last year – from about 270,000 to about 390,000.

“We’re in uncharted territory,” said the charity’s spokesman Mike Hochron. “Household budgets are tight and more people than ever are turning to the emergency system to stave off hunger.”

Houston Food Bank Chief Executive Brian Greene, who has worked in the industry since 1988, said it is difficult to make comparisons over time because demand has historically outstripped supply. He said the Houston Food Bank, the nation’s largest by volume, is distributing less food this year than last but that is because cash and food donations are down.

“If we had as much food as we had during the pandemic, we would distribute it,” he said.

Pantries supplied by the Blue Ridge food bank in Virginia also reported recent spikes. In April 2021, the Dulles South Food Pantry served 109 families a week. In April of last year, it helped 147. This month, the figure is 183 families a week.

The Highland Food Pantry in Winchester, Virginia, said it served about 90 families a week during the pandemic. This month, it’s serving about 135. Among the new clients is Haywood Newman, a 47-year-old handyman, who made it through COVID without assistance but says he’s struggling now.

“You’ve got to pay your water, trash, electric, car and rent – those companies aren’t going to help you out,” Newman said.


In Atlanta, the nation’s largest food-bank warehouse sprawls over four acres. Supply director Michelle Grear said it was designed to store about 5 million pounds of food, much of which is donated on pallets by food manufacturers and grocery stores. Last month, the inventory average was just 1.8 million pounds, she said.

The food that arrives is flying off the shelves, in many cases claimed by street-level pantries within hours. In March, the warehouse received 9.8 million pounds and distributed 9.6 million pounds, a razor-thin margin, according to Grear.

Sharawn White, a 31-year-old single mother who earns about $18 an hour at a property company, visited an Atlanta-area pantry for the first time this month. After paying daycare, rent and utility bills, White said she has about $300 left a month for food, gas and unexpected expenses.

In early April, White visited a community center to donate old clothes and noticed a line for the food pantry. “It ended up being a huge blessing,” she said.

Like most regional food banks, the one in Atlanta relies on government-funded programs and corporate and manufacturer product donations to obtain their food – they try not to spend cash to procure food on their own, except in crisis. In Atlanta, product donations from corporations and farmers have remained largely steady, accounting for more than half of the food distributed, according to the food bank’s records. But the ratio of government funding has changed dramatically.

Pre-pandemic, government-funding provided about 27% of the goods the Atlanta charity distributed, the food bank’s records show. At the height of the pandemic, in fiscal 2021, the government provided nearly 44%. This year, government funds will account for only about 13%.

To make up the difference, the Atlanta food-bank warehouse’s CEO Kyle Waide said his nonprofit will spend $18 million in cash reserves this fiscal year. Five years ago, the charity’s purchased food represented about 5% of the food it distributed to the community. This year, it accounts for 25%.

“We can do this for a while,” Waide said. “But it’s not sustainable.”

(Editing by Cassell Bryan-Low)



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Are we in a recession right now? What economists have to say – USA TODAY



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The Fed raising interest rates could lead the economy to a recession

Georgetown Professor Nada Eissa explains why she believes the Fed’s actions to get inflation under control will likely lead to a recession.

Andrea Kramar and Yasmeen Qureshi, USA TODAY

Over the past year, economists have proclaimed that the U.S. is headed toward recession so relentlessly, you might think we’re already knee-deep in a slump.

But the economy has been remarkably resilient and, though wobbly at times, has repeatedly defied forecasts of a downturn. Economists, in turn, have continued to push out their estimates of when a recession will begin.  

Yet forecasters still say there’s a 61% chance of a mild slide this year, according to those surveyed by Wolters Kluwer Blue Chip Economic Indicators.

All this begs the question: Are we in a recession now?

What happens in a recession?

Many Americans are familiar with the informal definition of a recession: Two straight quarters of declining gross domestic product, which is the value of all goods and services produced in the U.S.

But the real litmus test is more subtle. A recession is “a significant decline in economic activity that is spread across the economy that lasts more than a few months,” according to the National Bureau of Economic Research. NBER looks at a variety of indicators, particularly employment, consumer spending, retail sales and industrial production. The non-profit group often announces when a recession has begun and ended months after those milestones have occurred.

GDP fell each of the first two quarters of 2022 but much of the drop was traced to changes in trade and business inventories – two categories that don’t reflect the economy’s underlying health.  

Why do economists expect recession?

Over the past 14 months, the Federal Reserve has raised interest rates at the fastest pace in 40 years to bring down inflation. Typically, when the Fed hikes rates so aggressively, borrowing to buy a home, build a factory and make other purchases becomes much more expensive. Economic activity declines, the stock market tumbles and a recession results.

Was there already a recession?

No. During the pandemic, households amassed about $2.5 trillion in excess savings from hunkering down at home and trillions of dollars in federal stimulus checks aimed at keeping workers afloat through layoffs and business closures.

As a result, Americans have a big cushion of savings to help them weather high inflation and interest rates. They’ve whittled down much of those excess reserves but about $1.5 trillion still remains, according to Moody’s Analytics.

Consumers also still have lots of pent-up demand to travel, go to ballgames and dine out now that the health crisis has receded. So while consumption has flagged, rising just 1% annualized at the end of last year, it bounced back and grew 3.8% in the first quarter.

Also, both households and businesses have historically low debt levels, Moody’s says, and so they’re not burdened by high monthly debt service payments.

Back in a bull market: As stocks pass a key milestone, here’s what you should know

Are we in a recession right now?

The vast majority of top economists say no. Housing has been in the doldrums, with home prices starting to decline, because of high mortgage rates. And manufacturing activity has contracted for seven straight months, also in part because of high rates that have dampened business capital spending.

But consumer spending, which makes up about 70% of GDP, has been surprisingly healthy, jumping 0.5% in April after adjusting for inflation.

As a result, the most critical economic indicator- employment – has stayed strong, with the public and private sector adding an average of 283,000 jobs a month from March through May. Also, longstanding labor shortages have led many businesses to hold onto workers instead of laying them off despite faltering sales.

All told the economy has lost some steam but it’s not shrinking. GDP grew at a 1.3% annual rate in the first quarter. And it’s projected to grow 1% in the current quarter, according to S&P Global Market Intelligence.

Will there be a recession in 2023?

Most economists still expect a recession in the second half of the year. They say the Fed’s high interest rates eventually will be felt more profoundly by consumers and businesses. At the same time, banks are pulling back lending because of deposit runs that led to the collapse of several regional banks early this year.

Perhaps the most reliable indicator of a coming recession is an inverted yield curve. Normally, interest rates are higher for longer-term bonds than shorter-term ones because investors need to be rewarded for risking their money for a longer period.

But the yield on the 2-year Treasury bond has been well above the 10-year Treasury for months. That’s been a consistent signal of recession because investors move money into safer longer-term assets – pushing their prices up and their yields down – when the economic outlook grows dimmer. 

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US and Allies Condemn Economic Coercion With Attention on China



(Bloomberg) — The US and five major allies condemned economic coercion and non-market policies regarding trade and investment in a joint declaration that didn’t cite China by name but clearly had Beijing in mind.

The six countries expressed concern about practices that they say “undermine the functioning of and confidence in the rules-based multilateral trading system.”

The message from the US, Australia, Canada, Japan, New Zealand and the UK carries no economic consequences and mirrors one released by Group of Seven nations after a meeting of leaders last month.

A US Trade Representative official, speaking to reporters on condition of anonymity before the statement’s release, said China has been the biggest perpetrator of the behavior condemned in the declaration.


The official mentioned China’s decision to cut off trade with Lithuania in 2021 after that Baltic nation allowed Taiwan to establish a diplomatic office there as an example of the kind of economic coercion that the declaration singles out.

Read More: G-7 Eyes China With New Joint Effort Against Economic Coercion

In response to a reporter’s question, the official rejected any comparison to the US, which has become one of the most prolific purveyors of measures that could be seen as economic coercion, chiefly through financial sanctions and limits on technology exports to countries including China.

US sanctions occurred in accordance with US laws and procedures, and in light of relevant rules and norms, the official said. The declaration makes explicit that it didn’t apply to actions that have “a legitimate public policy objective.”

“These legitimate public policy measures include: health and safety regulations, environmental regulations, trade remedies, national security measures and sanctions, and measures to protect the integrity and stability of financial systems and financial institutions from abuse,” according to the declaration.



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Euro zone economy slips into technical recession after German revision



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People pass by the Europa-Center shopping mall, in Berlin.MICHELE TANTUSSI/Reuters

The euro zone economy was in technical recession in the first three months of 2023, data from European statistics agency Eurostat showed on Thursday, after downward revisions of growth in both the first quarter and the final quarter of 2022.

Euro zone gross domestic product (GDP) fell by 0.1 per cent in the first quarter compared with the fourth of 2022 and was 1.0 per cent up from a year earlier, Eurostat said in a statement.

That compared with flash estimates of growth of 0.1 per cent and 1.3 per cent published on May 16. Economists polled by Reuters had forecast on average respectively zero and 1.2 per cent expansion.

The revision was principally due to a second estimate from Germany’s statistics office showing that the euro zone’s largest economy was in recession in early 2023.


The euro zone figure for the fourth quarter of 2022 was also cut to –0.1 per cent from a previous reading of zero. The revisions confirmed that the euro zone was also in a technical recession.

This had been expected towards the end of last year as the euro zone wrestled with high energy and food prices and rising interest rates designed to curb inflation, but initial estimates had suggested the region had avoided this.

Along with Germany, GDP also declined quarter-on-quarter in Greece, Ireland, Lithuania, Malta and the Netherlands.

Eurostat said that household spending stripped 0.1 percentage points, public expenditure 0.3 points and inventory changes 0.4 points from quarterly GDP. Gross fixed capital formation added 0.1 points and while net trade a further 0.7 points as imports declined.



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