Today, news of any kind, it seems, can convey bad news about a recession
. In response to the ensuing inflation, roughly four-fifths of central banks worldwide have raised interest rates, by an average of 1.5 percentage points so far this year, causing stockmarkets to slump. The Federal Reserve is expected to raise rates for the fourth time in this cycle, and by three-quarters of a percentage point, after a meeting that ends on July 27th.
Most economists look to America’s National Bureau of Economic Research to find out if the economy is truly in recession. Its business-cycle-dating committee considers indicators beyondin making that judgment, including jobs numbers and industrial production. The committee is thought to weigh some factors more heavily than others.has used a similar approach, with a little guesswork, to judge the health of the rich world as a whole .
Governments across the rich world are also handing out money to help poorer people cope with roaring energy prices. In the euro zone, governments are stimulating the economy by the equivalent of about 1% of. Britain is unwinding the fiscal support put in place during the pandemic, which is dragging on growth, but has nonetheless offered handouts to poor households.
Declines in investment have in the past played a big role in downturns: in recessionary periods for thein negative quarters has come from shrinking capital spending. This time investment data have weakened, but not catastrophically so, according to data for America, the euro zone and Japan, compiled by JPMorgan.
True, there is some relief on the horizon. An index of supply-chain problems compiled by the New York Fed, comprising global transport costs and the opinions of purchasing managers, among other things, has clearly eased, though it remains well above the pre-pandemic norm . Commodity prices have come down since June. American petrol prices at the pump are currently falling by about 3% a week.
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