L'économie américaine recule, simple trou d’air ou risque de récession ?

L’économie américaine recule, simple trou d’air ou risque de récession ?

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The United States is facing a surprise decline in its economy. Washington is suffering from impressive inflation and hopes not to pay more for the bad timing of its stimulus plans.

Joe Biden says he’s not afraid of recession

The US economy posted an unexpected decline of 1.4% in the first quarter. Is this a simple air pocket or can we see a risk of recession? If for the moment it looks like a simple turbulence, the risks of a slowdown are still increased. Indeed, the surprise decline in GDP is explained by the plunge in foreign trade. Imports soared and exports slowed. In addition, companies continued to destock. According to Joe Biden, these factors are “exceptional”. The American president says he is not afraid of recession. In order to prove him right, we note that consumption and employment remain dynamic and that companies are posting record results.

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The problem is the impressive rate of inflation which is at 8.5%. Admittedly, this inflation is made worse by the Ukraine crisis and global shortages, but it was pushed by the Democratic president’s massive stimulus packages, even as post-Covid growth soared. America has not finished paying for this very bad timing. Moreover, with the surge in imports, much of this largesse further benefits overseas and commodity producers in the lead.

Washington must fight inflation without destroying growth

Despite this, the US central bank will certainly raise its rates. Indeed, the Fed has no choice. It too is behind in the normalization of its monetary policy. It only raised rates once, as the price hikes spread across the economy. Wall Street is therefore still anticipating a 0.5 point increase next week, and other increases by the end of the year. Obviously, fighting inflation without stifling growth is a challenge. Households still have a cushion of savings and benefit from strong wage increases. However, their morale is likely to falter if prices do not calm down. If the White House tries to put pressure on companies, it seems to lack leverage. Moreover, the April 28 announcement of a 30 billion support plan to arm Ukraine is unlikely to calm energy prices.

Etienne Lefebvre

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