AUGUSTA, Ga. (WJBF) – Some news outlets across the country are reporting a possible recession could be on the horizon. While world news indicates a recession looms, we came to Augusta University to talk with professors about what’s going on and should we be preparing.
We sat down with Augusta University Economics Professor Simon Medcalfe. He shared with us, “The economy has slowed certainly in the United States.”
The questions are coming. Will there be a recession soon? And while talks surround the possibility of a decline in economic activity, Medcalfe assured us that will not be the case, at least for the next year.
He said, “We are not in a recession, right now. My estimates for the local area is the probability for a recession is really low, less than two percent.”
Additionally, Medcalfe said a recession begins when the economy starts to shrink. Right now, he said even though it’s not getting better, the economy is still growing. That includes jobs being added with the lowest unemployment rates in years.
He said, “I’ve seen some estimates by some economists at the national level. They seem to think that the probability of a recession in the next year could be about 33 percent. That’s probably at the top end of that range.”
So what’s prompting the recession talk? Forbes reports there are countries on the brink of recession ahead of 2020 due to a global slowdown in economic growth. Those countries are Hong Kong, the U.K., Germany, Italy, and China.
Political Science Expert Gregg Murray points to the presidential election for the recession conversation between Democrats and Republicans.
Murray, Augusta University Political Science Professor told us, “When the economy is going great, often times presidents or the president’s party will continue in office and get reelected. And when the economy is doing terribly, a lot of times the incumbent or the incumbent’s party or the president’s party will more than likely will be thrown out of office.”
He said the 2008 election amid the recession that year is a good example. Murray also said the Federal Reserve kicked in back then to help lessen the economic blow and now the same body is working again.
He added, “The president has been encouraging the Federal Reserve to lower interest rates.”