Bloomberg Economics released a new model projecting the state of the U.S. economy this week, and it's more bad news for President Joe Biden and Democrats running in the midterms.
Bloomberg economists Anna Wong and Eliza Winger crunched the numbers on recession probability and the result was an optimism-killing 100% in the next year — another repudiation of the Biden White House's claims that the president's "Build Back Better" policies are working and making life better for Americans.
Bloomberg's forecast produced a "higher recession probability across all timeframes, with the 12-month estimate of a downturn by October 2023 hitting 100%, up from 65% for the comparable period in the previous update." So no, Biden is not building back better.
"The deterioration in the outlook was driven by a broad-based worsening in the economic and financial indicators," Bloomberg said of its latest forecast, which uses more than one dozen macroeconomic and financial indicators to predict the chance of an economic downturn.
The Bloomberg Economics model also showed the odds of a recession hitting earlier in the next year increasing: within 11 months, the odds of a recession are 73 percent — up from 30 percent in the previous forecast — while the 10-month probability is now 25 percent — up from 0% previously.
As Josh Wingrove notes in Bloomberg's report on its economists' forecast, the latest update "will be unwelcome news for Biden, who has repeatedly said the US will avoid a recession and that any downturn would be 'very slight,' as he seeks to reassure Americans the economy is on solid footing under this administration.
A Bloomberg Economics model by @WingerEliza and @AnnaEconomist now projects that the probability of a US recession in the next 12 months is 100% -- a near certainty. Full report on @TheTerminal. A separate @business survey of economists found 60% odds.https://t.co/RbacOEpNIY
— Josh Wingrove (@josh_wingrove) October 17, 2022
And these economists aren't alone in their dour predictions of what's to come as inflation continues to run at 40-year highs and Federal Reserve Chairman Jerome Powell pledges that more interest rate hikes will come and be another pain-point for Americans trying to make ends meet as real wages fall. Bloomberg also completed a survey of 42 economists — the kind President Biden likes to cite in his claims that everything is running smoothly — and the result "predicts the probability of a recession over the next 12 months now stands at 60%, up from 50% a month earlier."
"The forecasts provide a sharp contrast to Biden's upbeat tone," Wingrove continues in Bloomberg. "The president has focused on strong job growth as he campaigns to help Democrats retain their House and Senate majorities in elections three weeks from now."
As Leah reported earlier this week, White House Press Secretary Karine Jean Pierre brushed aside reports like the Bloomberg Economics forecast and maintained that the economy is doing just fine — the usual denial of reality from the White House Americans have grown used to. "What we are seeing right now is the job market is strong, the labor force is strong," Jean-Pierre contended. "And that is not what we see usually before — before a recession," she added.
DOOCY: "How is it that we can be barreling towards a recession and the economy is, as the president says 'strong as hell?'"
— Townhall.com (@townhallcom) October 18, 2022
KJP says that "the job market is strong," "the economy is going through a transition," and highlights Joe Biden's focus on "equity." pic.twitter.com/EZm9ZftXH3
But, the U.S. economy has already recorded two consecutive quarters of negative economic growth — meeting the standard definition of a recession, and now Bloomberg is backing up the sorry, downward-spiring state of the economy under Biden by saying a recession is 100% likely in the next year.