Majors

Deloitte: A US Recession Remains ‘Unlikely’

MajorsMar 24, 2016

Deloitte: A US Recession Remains ‘Unlikely’

What is likely, however, is that the economy will keep growing at its current slow, and some would say unsatisfactory, pace.

New York--A report released this week by Deloitte states that the chance the United States will slip into another recession is slim but so is the probability that growth will pick up substantially.

In its U.S. Economic Forecast published online Tuesday, Deloitte stated that, “The likelihood of a recession remains low but the highest probability is that the slow, unsatisfactory growth of the post-recession period in the U.S. is the economy’s new normal.”

In the forecast, the New York-based professional services firm sketched out four different possible future paths for the U.S. economy and then placed subjective probabilities on each.

The least likely scenario is recession, with Deloitte putting the odds of another massive slowdown at only 5 percent.

The scenario Deloitte pinpointed as being the most likely, at 55 percent, is “the baseline,” where U.S. domestic demand is strong enough to provide employment for workers returning to the labor force, unemployment hovers around 5 percent and annual GDP growth is capped at about 3 percent.

The two other scenarios outlined were slower growth (25 percent) and a coordinated global boom (15 percent).

Deloitte’s U.S. economic forecast, which was published online Tuesday, also delved into specific sectors of the economy, including consumer spending.

According to the report, the U.S. consumer, the “longtime supporter of the global economy,” has remained surprisingly resilient but has begun saving more money, not spending like they did in the early 2000s.

Deloitte said it expects the U.S. savings rate to settle in at just over 5 percent, which is consistent with the amount of money consumers saved in the 1990s.

The report also noted that while there has been job growth and wages have picked up a little too, the consumer still faces a few obstacles.

Chief among them are the number of homeowners who remain “underwater” on their mortgages, baby boomers nearing or at retirement with inadequate savings and the growing wealth gap.

The Deloitte report states that, “As long as a large share of the gains from technology and other economic improvements flows to a relatively small number of households, overall U.S. consumer spending is likely to remain relatively restrained.”  

The report was authored by Daniel Bachman, a senior manager for U.S. macroeconomics at Deloitte Services LP.

Download a PDF of the entire forecast on the Deloitte University Press website.

Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

The Latest

SurveysOct 21, 2021
10 Retailers on Why They Expect the Diamond Boom to Continue

However, their optimistic outlook comes with a hint of caution due to a number of factors out of their collective control.

SourcingOct 21, 2021
This Coffee-Table Book Is the Perfect Present for Diamond Lovers

The tome offers an appreciation for the stone through the voices of celebrities, designers, and other diamond lovers.

ColumnistsOct 21, 2021
Squirrel Spotting: It’s a Diamond Moment!

It’s no doubt diamond sales are booming, but why? Peter Smith explores the complicated reasons why consumers want the stones right now.

Brought to you by
Buying a Diamond is More Than Knowing the 4C’s

Buyers may be excited about online diamond deals, but there are uncertainties surrounding the authenticity and clarity of the diamonds.

IndependentsOct 21, 2021
Quiz: How Closely Have You Been Reading Our Columns?

Brush up on the finer points of customer budgets, recruiting new employees and driving traffic to a new website with this quick test.

Weekly QuizOct 14, 2021
This Week's Quiz
Test your knowledge of jewelry news from the week of Oct. 11-15, 2021.
Take the Quiz
TrendsOct 21, 2021
Amanda’s Style File: Prepare to ‘Fall’ in Love

Here are 15 jewels to celebrate the season.

CollectionsOct 21, 2021
Contemporary Jewelry Designers to Collect Now

Experts opine on the independent fine jewelry brands with the greatest investment potential.

Brought to you by
Viva Italia! Why the JCK Italian Pavilion Was a Sight Worth Seeing at JCK Las Vegas

One of the highlights of the JCK show in Las Vegas has always been the Italian Pavilion, buzzing with excitement and elegance.

SourcingOct 21, 2021
Diamond Jewelry Demand at a ‘Record High,’ Alrosa Says

Both Alrosa and De Beers continue to report robust rough diamond sales fueled by strong consumer demand.

×