The U.S. economy is effectively certain to enter a recession in the next 12 months, according to model projections from Bloomberg Economics.
Bloomberg News described this as “a blow to President Joe Biden’s economic messaging ahead of the November elections.”
The probability models maintained by Bloomberg economists Anna Wong and Eliza Winger had earlier shown just a 65 percent chance of a recession over the coming 12 months.
A separate Bloomberg survey of 42 economists predicts the probability of a recession over the next 12 months rose to 60 percent recently, up from 50 percent a month earlier.
The odds of entering a recession even sooner are also up, according to the model. In the 11-month window, the probability is 73 percent, up from 30 percent. In the 10-month window, the probability rose to 25 percent from zero.
The Bloomberg Economics model uses 13 macroeconomic and financial indicators to predict the chance of a downturn at horizons of one month to two years.
The Bloomberg Economics model uses 13 macroeconomic and financial indicators to predict the chance of a downturn at horizons of one month to two years. The odds of downturn increased in every timeframe, Bloomberg reported.