While many debate the chances of a recession, Yahoo Finance Markets reporter Josh Shaffer outlines what the latest economic data tells us.
– all right. Now, the question is, will we go into recession or not? It’s been a question on everyone’s mind since the Fed started hiking rates. Many economists and analysts at Yahoo Finance are predicting a recession sometime this year. But the more data we get, the more likely it is that the economy will remain strong in the face of high inflation. Here’s Yahoo Finance’s own Josh Shafer with more.
Josh Shaffer: [INAUDIBLE] What’s surprising is that this information just started coming in this morning with PCE data —
– PCE, mm-hmm
Josh Shaffer: — More and more people are thinking about that recession but pushing it a little further. So Oxford Economics, which we talk about a lot here at Yahoo Finance and which we cite constantly, are now saying that we’ve seen the recession that we saw in Q3 going into Q4. And when you look at the overall data that we’ve seen this week, you’ve seen GDP move, right? We thought it was 1.1% growth in the first quarter. It showed a 1.3 percent growth in the first quarter.
When you look at jobless claims and what we’ve seen from the fraudulent data in Massachusetts now correct that problem, actually the number of people filing jobless claims is lower than we originally expected. And then you drive it forward, right and you think, well, what does that mean for the path of the federal rate hike, and how is that priced?
guess what? Check out the CME FedWatch Tool this morning. People are now increasing the cost of the June hike. We have been talking about this for two weeks. That was almost the opposite of the other way back a few weeks ago, so it’s been interesting to see how this data has started to push things in. Are they going to walk or pause in June? And then there could be a hike in July because we get that jobs report next week.
– right. Exactly. I mean, the assumption is, if we had a recession, they wouldn’t be going in that direction.
Josh Shaffer: right.
– Or at least if we’re in a recession. Thank you so much, Josh. I appreciate it.