News

Will there be an economic recession in 2023?

While a downturn in the economy is evident, an ag economist says the US could continue to avoid a recession in 2023.  

Rob Fox with CoBank Knowledge Exchange tells Brownfield it’s falling slowly.

“If you look at the graph of our GDP from month-to-month or quarter-to-quarter it looks exactly like an airplane coming in for a nice smooth landing. There is absolutely no evidence that we’re in for a crash, but these things are very difficult to predict.”

He says a lot depends on how aggressively the fed pursues their inflation reduction objectives, having already applied a 4.4% increase in the federal funds borrowing rate in the last nine months.

“Over the past two to three months headline inflation has dipped from a peak of around 9%, now it’s down to 7%. We still have a long way to go to get it down to that 3% range, but maybe by the end of 2023.”

Fox says while the US may dip into negative GDP next year, he thinks both the general economy and farm economy in the US are well positioned compared to other countries.

CoBank’s 2023 Year Ahead Report states that it will be the second quarter of 2023 before a recession would hit because it would take a few months for the tight labor market, aggressive consumer spending and record high corporate profit margins to reverse course.