Economist and Public Speaker Elliot Eisenberg said the United States will likely enter a recession. He expects the downturn to last less than a year, however, and not be as severe as the Great Recession.
Eisenberg spoke May 6 during the Bank Holding Company Association’s Spring Seminar at the Omni Viking Lakes Hotel. His comments came approximately one week after Goldman Sachs said there are 15 percent odds of a recession in the next 12 months and 35 percent within 24 months.
Eisenberg said the current state of the U.S. housing market is much stronger than it was when the Great Recession struck, spawning a foreclosure crisis. Goldman Sachs expects the U.S. economy not to contract.
“It should be easier to reduce the jobs-workers gap during this cycle than in the past because the employment market is still normalizing after COVID disruption, which Goldman Sachs Research expects will add as many as 1.5 million workers to the economy in excess of normal population growth,” the firm stated.
Eisenberg cited numerous positive economic indicators: The current 3.6 percent unemployment rate is nearly the same as before the pandemic struck. To Eisenberg, Covid-19 has shifted from a pandemic to an endemic, with high levels of herd immunity within the United States. He compared the severity of the current Covid-19 variant to something between a bad and an easy Avian Flu season. U.S. coronavirus deaths remain at their lowest point since the pandemic began.
Still, inflation persists: May’s Consumer Price Index jumped 8.3 percent year-over-year. Eisenberg said China’s current “Zero COVID” strategy will only worsen existing domestic supply chain challenges that are already driving up inflation. Labor force participation is down significantly — there are 11 million open jobs but only 6.5 million unemployed Americans as many older workers retired during the pandemic, parents stayed home to take care of their children, and more people started their own businesses.