US economy will continue to recover - Powell

[pixie85]

The thing about printing money is that it makes your money a lot less valuable, when it doesn't worth as much as it used to you have to pay more for stuff and when you pay more for stuff you end up having more debt for it and when you have more debt there is a crisis and when there is a crisis you print more money. You see how it goes around in circles?

This is exactly why I believe it should be noted that governments should not print money, no matter what the situation is, flushing down the economy time to time would teach people a lesson, some will be super poor, but people are poor already, but in return we will get hundreds of billions of dollars (even trillions) not going towards companies, those companies will bankrupt and this will give a lot bigger lesson to be careful to companies than people.

Printing makes money less valuable so it's bad for people with savings but it also has some positive sides. People who own property will see it retain its value and the newly printed money will save the economy from going into full recession shutdown mode.

If the US economy does recover the stock market will go back up and so will Bitcoin so let's hope this is more than a prediction.

[jaysabi]

Yeah, that's because it's not safe to go out and do things like there is no pandemic.  We're technically in a "recession" because we've had two straight quarters of negative GDP growth, but again, not because the economy has faltered on its own, but because of a health crisis forcing everyone to reduce economic activity.  The recession will be "over" in that GDP is going to surge in the third quarter, but we'll still be far far below where we would have been without the pandemic.  Characterizing the economy as being in "recovery" hides how bad things still are.

Recession will be there for at least two more quarters. Those who have burned up all of their savings are not going to splash their money, even if the restrictions on social distancing are removed. I am not sure how the GDP growth is calculated, but if I am not wrong, then the GDP of a particular quarter is compared to the figure from the corresponding quarter of previous year (for example, Q1Y2020 vs Q1Y2019 and so on).

Well the definition of a technical recession is two or more consecutive quarters of negative GDP growth.  We hit that in the first and second quarters of the year with approximately -1.3% and -9% respectively (on a non-annualized basis).  Every major bank is expecting robust growth in third quarter around 7-9% (non-annualized) and a modest increase in the fourth quarter.  So on in this vein, we will no longer be in a technical recession as of the end of the third quarter.

A recession more generally (and not technically) can compare year-over-year quarterly results.  From this perspective, 3rd and 4th quarter of this year are very likely to be lower than 3rd and 4th quarter last year, which could qualify as a recession (even though the economy is technically growing quarter over quarter).  Barring a setback, we would expect this "recession" to have ended by the end of the first quarter of 2021, since (again barring a setback) Q1 2021 GDP will be higher than Q1 2020.

However, even if that were the case where no way you look at it is the economy in "recession," I think it will be clear that the economy is likely to be pretty poor at that point given where we were before Covid happened, so the classification of recession or not is missing the forest for the trees.

[jacafbiz]

US has the best economic in the world and most country depend on it, as long as people still have trust in USD expect the economy to recover. A lot is going on here that is merely politics and when election is over all these noise we die down and focus will be on substance. FED will do everything in their capacity to let this work out fine

[panganib999]

Further there’s more bad news for the jobless people as he’s claimed that they’ll not be able to land jobs, and thus they will continue to remain jobless in the long run.

Then how come it would be claimed that the US economy will continue to recover when there is no existence of landing a job to those jobless people who specifically might have loss their jobs all due because of the existence of the pandemic. It was an awful surprise to know that the government cannot land any job for them and they would just remain on that current situation for the long run as stated. Is it contradicting to claim that they are into the phase of recovery when there is no availability of jobs for the people? Man power is one of the elements needed by the country to prosper and continuously grow, it would really be a sad thing to claim such if job availability won't come for a long run.

[exstasie]

Well the definition of a technical recession is two or more consecutive quarters of negative GDP growth.  We hit that in the first and second quarters of the year with approximately -1.3% and -9% respectively (on a non-annualized basis).  Every major bank is expecting robust growth in third quarter around 7-9% (non-annualized) and a modest increase in the fourth quarter.  So on in this vein, we will no longer be in a technical recession as of the end of the third quarter.

A recession more generally (and not technically) can compare year-over-year quarterly results.  From this perspective, 3rd and 4th quarter of this year are very likely to be lower than 3rd and 4th quarter last year, which could qualify as a recession (even though the economy is technically growing quarter over quarter).  Barring a setback, we would expect this "recession" to have ended by the end of the first quarter of 2021, since (again barring a setback) Q1 2021 GDP will be higher than Q1 2020.

However, even if that were the case where no way you look at it is the economy in "recession," I think it will be clear that the economy is likely to be pretty poor at that point given where we were before Covid happened, so the classification of recession or not is missing the forest for the trees.

I think the NBER's criteria (the basis by which the US is "officially" in recession or expansion) is relevant here. They don't use the commonly held definition about 2 consecutive quarters in contraction:

While the popular definition of a recession is “two consecutive quarters of negative real gross domestic product (GDP) growth,” the NBER does not strictly abide by this designation (note 2). Instead, the committee broadly defines a recession as a “significant decline in economic activity spreading across the economy, lasting more than a few months.”

This is what they said about the current recession, as of 7 weeks ago:

The committee's view is that while each of the three criteria—depth, diffusion, and duration—needs to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another. For example, in the case of the February 2020 peak in economic activity, we concluded that the drop in activity had been so great and so widely diffused throughout the economy that the downturn should be classified as a recession even if it proved to be quite brief.

https://www.nber.org/cycles/recessions_faq.html

As such, I expect them to wait a while before they are willing to declare the recession over, even if Q3 shows a robust recovery.

[Silberman]

The thing about printing money is that it makes your money a lot less valuable, when it doesn't worth as much as it used to you have to pay more for stuff and when you pay more for stuff you end up having more debt for it and when you have more debt there is a crisis and when there is a crisis you print more money. You see how it goes around in circles?

This is exactly why I believe it should be noted that governments should not print money, no matter what the situation is, flushing down the economy time to time would teach people a lesson, some will be super poor, but people are poor already, but in return we will get hundreds of billions of dollars (even trillions) not going towards companies, those companies will bankrupt and this will give a lot bigger lesson to be careful to companies than people.

Printing makes money less valuable so it's bad for people with savings but it also has some positive sides. People who own property will see it retain its value and the newly printed money will save the economy from going into full recession shutdown mode.

If the US economy does recover the stock market will go back up and so will Bitcoin so let's hope this is more than a prediction.

There is no doubt there are some positive sides to printing money when it comes to a fast recovery of the economy but by doing so governments whether they like to admit or not are stealing money from their citizens, because as we know even if the amount of money in your savings account remains the same now what you can purchase with has gone down due to inflation, this is one of the many reasons I think there is future for bitcoin because it cannot be printed at will and once we go through hyperinflation as governments lose control of their printing machines people will try to look for ways to protect themselves and bitcoin will be there to help them.

[jaysabi]

This is what they said about the current recession, as of 7 weeks ago:

The committee's view is that while each of the three criteria—depth, diffusion, and duration—needs to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another. For example, in the case of the February 2020 peak in economic activity, we concluded that the drop in activity had been so great and so widely diffused throughout the economy that the downturn should be classified as a recession even if it proved to be quite brief.

https://www.nber.org/cycles/recessions_faq.html

As such, I expect them to wait a while before they are willing to declare the recession over, even if Q3 shows a robust recovery.

Yeah, this is kind of my point. That if we are going by the technical definition of a recession, we will be showing the recession as having ended before (and possibly long before) we actually start to feel like the economy is getting back to firm ground.  After having fallen so far, any modest recovery would be enough to classify it as "not technically a recession" any longer even though what has been recovered leaves you far behind were you would have been without the set back.

I'm not sure I like the subjective nature of deciding what a recession is though.  The "you'll know it when you see it" argument is used for art and porn, sure. But I don't like it for qualifying a recession.  That one is too technical.

[Kez1817]

US has the most powerful economy that's  we need not wonder if they will continue to recover from this economic downfall. Also it is not just the first time that the economy of US placed in a serious economic downturn but they always recover.

[noorammak]

The US economy will recover soon, FED will continue to lower interest rates at low levels until 2023. This means that the US has time to make a breakthrough in the recovery process.
I think it will be time to wait until the epidemic stabilizes and the businesses break away from China before operating normally again.

[proTECH77]

US don't joke with their economy, that is why they are seriously working to make such they recover all they have loss during this covid-19 in their country.
The reason why their governmen will continue to recover all they have loss during the pandemic, is because of the re-election that is coming up soon, so that opposition party  will not use economy challengies to campaign against the president.
I think with the strategies US has fixed in every conner of the economic, show that they are improving in the areas of economy.

[Blackrain13]

US are facing the economic problem seriously and find a way to provide a better solution for this, that's why they recover fast from what covid 19 pandemic brought to their country. Hoping that other country can also recover fast even covid patients is still a lot.

[abhiseshakana]

US are facing the economic problem seriously and find a way to provide a better solution for this, that's why they recover fast from what covid 19 pandemic brought to their country. Hoping that other country can also recover fast even covid patients is still a lot.

According to Keynes, a recession is usually caused by an event, including a disaster, that brings the economy out of its equilibrium point. This disaster caused fear both to producers and consumers. As a result, consumers reduce their consumption activities, so that automatically, producers respond by reducing production activities. This reduction in turn leads to layoffs.

Even though the US economy is currently in a recession, it does not mean that it is very bad for the US, it is precisely the recession that occurred in the US affecting other countries that depend on the dollar and has bad consequences for the national economies of many countries. The potential for negative effects from the US recession to other countries in the world is because the US is an important export destination, the US is a source of investment and the US is the price maker for the majority of world commodities.

[jaysabi]

US are facing the economic problem seriously and find a way to provide a better solution for this, that's why they recover fast from what covid 19 pandemic brought to their country. Hoping that other country can also recover fast even covid patients is still a lot.

According to Keynes, a recession is usually caused by an event, including a disaster, that brings the economy out of its equilibrium point. This disaster caused fear both to producers and consumers. As a result, consumers reduce their consumption activities, so that automatically, producers respond by reducing production activities. This reduction in turn leads to layoffs.

Even though the US economy is currently in a recession, it does not mean that it is very bad for the US, it is precisely the recession that occurred in the US affecting other countries that depend on the dollar and has bad consequences for the national economies of many countries. The potential for negative effects from the US recession to other countries in the world is because the US is an important export destination, the US is a source of investment and the US is the price maker for the majority of world commodities.

Well in this case, the recession is artificially imposed in that the government is the one that shut things down in an attempt to control the spread of the virus. It may have happened without government intervention as the virus spread and people began to fear contracting it and therefore voluntarily curtail economic activity, but I doubt it would have been as severe as mandated shutdowns. Because it's artificially imposed, there's hope for a faster recovery than if it was an organic recession.

[michellee]

As a big country, the US economy will continue to recover. However, it will not happen quickly because the government needs to clarify first what they prioritize to recover. Not just the US, the other countries will also do the same, and whether it is developed countries or big countries, the process is still running. The recovery process will still run, no matter if the election will coming in November, and no matter who is in charge, they need to continue the recovery.

[Dorodha]

As the United States is a developed country they are taking various steps to improve their country's economy. There is a lot of focus on activities after the lockdown is over allocating more money to different sectors but it is often seen that it takes a long time for the economy to return to growth after a deep recession. Recovery can be prolonged if the virus takes longer to control.

[Vishnu.Reang]

As a big country, the US economy will continue to recover. However, it will not happen quickly because the government needs to clarify first what they prioritize to recover. Not just the US, the other countries will also do the same, and whether it is developed countries or big countries, the process is still running. The recovery process will still run, no matter if the election will coming in November, and no matter who is in charge, they need to continue the recovery.

The advantage with US is that they can borrow huge amounts of money at near-zero interest rates. Now this is some advantage that the other nations can't count on. In the US they already had the first round of economic stimulus. The impact was visible in the economy, as the employment rate grew (although not to the level that they had prior to the pandemic). But a full economic recovery may not be possible until the virus is completely eradicated. Even now, anywhere from 700 to 1,200 new deaths are being reported every day from the United States.

[michellee]

As a big country, the US economy will continue to recover. However, it will not happen quickly because the government needs to clarify first what they prioritize to recover. Not just the US, the other countries will also do the same, and whether it is developed countries or big countries, the process is still running. The recovery process will still run, no matter if the election will coming in November, and no matter who is in charge, they need to continue the recovery.

The advantage with US is that they can borrow huge amounts of money at near-zero interest rates. Now this is some advantage that the other nations can't count on. In the US they already had the first round of economic stimulus. The impact was visible in the economy, as the employment rate grew (although not to the level that they had prior to the pandemic). But a full economic recovery may not be possible until the virus is completely eradicated. Even now, anywhere from 700 to 1,200 new deaths are being reported every day from the United States.

Even if the US can borrow huge amounts of money, that will not be the solution to prevent the crisis. I think the US government still figure out how to stimulate the economy to grow as before. The US's impact happens to all countries, and besides searching for the way to solve the economic crises, the government is trying to work hard to prevent the new case. It still needs time to recovery everything, including the economy, even if the vaccine is found. I think that the US will use tight regulations in any sector to prevent the situation from getting worst.

[bryant.coleman]

Even if the US can borrow huge amounts of money, that will not be the solution to prevent the crisis. I think the US government still figure out how to stimulate the economy to grow as before. The US's impact happens to all countries, and besides searching for the way to solve the economic crises, the government is trying to work hard to prevent the new case. It still needs time to recovery everything, including the economy, even if the vaccine is found. I think that the US will use tight regulations in any sector to prevent the situation from getting worst.

A ballooning federal debt can benefit none. It is true that the US can borrow money with relative ease, but in the end this is not a viable solution. Trump came to power in 2016, promising not to increase the federal debt. He was unable to keep that promise. It looks as if he has done even worse than Obama. Till now, Trump has added close to $4 trillion as federal debt.

[michellee]

Even if the US can borrow huge amounts of money, that will not be the solution to prevent the crisis. I think the US government still figure out how to stimulate the economy to grow as before. The US's impact happens to all countries, and besides searching for the way to solve the economic crises, the government is trying to work hard to prevent the new case. It still needs time to recovery everything, including the economy, even if the vaccine is found. I think that the US will use tight regulations in any sector to prevent the situation from getting worst.

A ballooning federal debt can benefit none. It is true that the US can borrow money with relative ease, but in the end this is not a viable solution. Trump came to power in 2016, promising not to increase the federal debt. He was unable to keep that promise. It looks as if he has done even worse than Obama. Till now, Trump has added close to $4 trillion as federal debt.

Right. We will see what will happen with that. But I am not sure if that number will decrease in a short time. Instead of reducing the debt, the US can make its debt bigger in this pandemic. I am just worried about their people who can not survive if the pandemic continues until the next year. The next candidate will have difficult work to make the situations better.

[bryant.coleman]

Right. We will see what will happen with that. But I am not sure if that number will decrease in a short time. Instead of reducing the debt, the US can make its debt bigger in this pandemic. I am just worried about their people who can not survive if the pandemic continues until the next year. The next candidate will have difficult work to make the situations better.

Trump has sanctioned hundreds of billions of USD worth of handouts and huge stimulus packages, to strengthen the economy during the recent months. As a result, the federal debt grew larger. But at the same time, these measures helped a lot of people who lost their jobs during the pandemic. But the question is for how long this situation can go on. Already 6 months have passed and there is no sign of any slowdown in the spread of the infections.