US headed into another recession if consumer sentiment trend continues, economists say

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Fox Business 11 October, 2021 - 10:30am

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Diane Swonk on economic recovery, stimulus

The U.S. economy appears to be sliding into another recession based on declining consumer sentiment – even though employment and wage growth suggest otherwise, according to two academic economists.

New research published last week by David Blanchflower of Dartmouth College and Alex Bryson of the University College London suggests that consumer expectations indexes from the Conference Board and the University of Michigan tend to predict economic downturns up to 18 months in advance in the U.S.

Every recession since the 1980s has been precipitated by at least a 10-point drop in the expectations indices, they found. Other reliable indicators include a single monthly rise of at least 0.3 percentage points in unemployment and two consecutive months of employment rate declines.

"The economic situation in 2021 is exceptional, however, since unprecedented direct government intervention in the labor market through furlough-type arrangements has enabled employment rates to recover quickly from the huge downturn in 2020," Blanchflower and Bryson wrote. "However, downward movements in consumer expectations in the last six months suggest the economy in the United States is entering recession now (Autumn 2021)."

The Conference Board’s gauge of expectations declined in September to the lowest since November last year, marking the third consecutive month of declines. At the same time, the University of Michigan's gauge actually increased last month.

The economists highlighted data suggesting the Conference Board expectations peaked in March 2021 and then fell by 26 points through September 2021. The Michigan data, meanwhile, likely peaked in June 2021 and fell by 18 points by August, they found.

The "clear downward movements in consumer expectations" over the past six months are evidence the U.S. is currently heading into a recession, the economists said. Although that's not reflected in the hiring situation – the unemployment rate is falling and the economy is adding jobs, albeit at a slower-than-expected pace – that's likely because the U.S. government has played a large role in propping up the labor market.

"It seems to us that there is every likelihood that the US is entered recession at the end of 2021," they wrote.

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Granville Adams, 'Oz' star, dead at 58

Bloomberg 11 October, 2021 - 10:30am

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"Goodnight, sweet prince/and flights of angels sing thee to they rest," producer-screenwriter Fontana, 70, wrote along with a photo of the late actor. 

Following the tragic announcement, Fontana and "Oz" star Dean Winters, 57, created a GoFundMe to help cover the dramatist’s medical costs. 

"As many of you know, our friend and brother Granville Adams has been diagnosed with cancer," Fontana wrote on the fundraiser’s page. "In only a few months, the medical bills have skyrocketed to astronomical levels. Not only does he have to battle this ruthless disease, but now he has to fend off the hospital bills the insurance company refuses to pay. 

He added, "We want to gather together and show Granville our love by clearing this quarter’s bills, giving Granville concrete support in his fight against this vicious disease." 

At the time of the star’s death, the crowdfunding campaign had amassed nearly $100,000 in contributions. 

Adams had starred in all six seasons of "Oz," in which he played Zahir Arif, a burglar who finds salvation in Islam while incarcerated at the fictitious Oswald State Correctional Facility. The thespian also portrayed Officer Jeff Westby in "Homicide: Life on the Street" from 1996 to 1999 and appeared in "Homicide: The Movie" in 2000 following the series’ cancellation. Adams also had a minor role in "Empire" in 2002. 

The actor’s "Oz" costars flocked to social media to mourn his passing. 

"I first met Granny in 1992 and I immediately drank the Kool Aid," he wrote. "His smile was infectious, his chuckle was intoxicating. He never, ever spoke ill of anyone and I defy anyone who knew him to say anything negative about this man." 

He continued, "Granville was beloved, period. A humble, beautiful soul who just elevated the afterlife to a whole new level. You will be missed my friend. You are my brother and I’m a better human being for knowing you. RIP G." 

"I LOVE this man and the entire group of family/friends that we all created," he added. "Sleep well Prince! We’ll see each other again." 

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