U.S. growth forecast slashed — RT Business News
Rising prices and falling consumer spending will push the U.S. economy into recession, says Fitch
Soaring inflation and aggressive rate hikes by the Federal Reserve will push the U.S. economy into a 1990-style recession in the spring, Fitch Ratings warned on Tuesday.
The agency has lowered its growth forecast for this year and for 2023, with US GDP now expected to grow 0.5% next year, down from the 1.5% growth forecast in June. .
According to Fitch, the economic slowdown will push the unemployment rate in the country from the current 3.5% to 5.2% in 2024 and lead to the loss of millions of jobs. The report said inflation remains the biggest problem for the US economy, with rising costs of living hitting cash-strapped consumers and undermining their confidence.
The agency warned that inflation “experience too much exhaustion” on household income next year, reducing consumer spending, which will lead to a slowdown in the second quarter of 2023.
READ MORE:
US recession forecast hits 100% – Bloomberg
Consumer prices rose more than expected in September, with inflation well above the Fed’s 2% target. This bolstered expectations that the Federal Reserve will continue its aggressive inflation-fighting campaign and resort to another 75 basis point interest rate hike next month.
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