More than half of the 50 US states are showing signs of a decline in economic activity. This is a key signal that usually precedes the entry of the monitored economy into recession. That’s according to current research by the Saint Louis branch of the Federal Reserve System.
The report follows the San Francisco branch of the Federal Reserve System, which was released earlier last week. And it also implies that the American economy may fall into recession in the coming months.
Unemployment rate to rise to 4.6%
The Fed’s St.Louis branch found that 26 US states are showing a decline in economic activity, raising “reasonable concerns” that the US economy as a whole is heading into recession. The Federal Reserve previously estimated that the U.S. unemployment rate would rise to 4.6 percent next year. So far, however, he only expected a reduction in economic growth, not directly a recession, i.e. a decline in the performance of the American economy.
The US could lose up to two million jobs
According to Tim Duy, chief economist at SGH Macro Advisors, the US economy could lose up to two million jobs. “This would mean a recession similar to 1991 and 2001,” Duy told Reuters.
