-Former Commerce Secretary Warns US Headed for Recession-
Former Commerce Secretary Wilbur Ross has warned of an impending U.S. recession due to the lingering effects of pandemic-related stimulus. While Wall Street maintains a more optimistic outlook, citing strong GDP and low unemployment, Ross argues that the economy was artificially inflated by the $5 trillion in stimulus. He points to inflation, high consumer prices, and the over-reliance on government jobs as indicators of a looming recession.
Wilbur Ross Predicts US Recession
Former Commerce Secretary Wilbur Ross warned in an interview with Bloomberg last week that the U.S. is moving toward a recession due to the economic aftereffects of pandemic-related stimulus. Ross’ prediction contrasts with the generally more optimistic view on Wall Street, where many analysts believe the U.S. can avoid a recession as gross domestic product (GDP) continues to grow and unemployment remains low.
However, Ross remains bearish, arguing that the economy is now coming down from an artificially propped-up state. Attributing the looming recession to the government’s pandemic response, particularly the $5 trillion in stimulus measures, he remarked:
I think the U.S. is headed toward probably a very mild recessionary period, and that shouldn’t be too surprising. It was artificially propped up by all the great situations that have prevailed, and all that cash that was pumped into the economy in the aftermath of Covid. I think they overdid that.
He further pointed out that most of the stimulus funds were spent quickly by Americans, leading to a sharp rise in demand without a corresponding increase in supply. This, he said, was a primary cause of inflation.
Ross also noted that the strength of the labor market was partly skewed by the surge in government jobs, estimating that about 30%-40% of post-pandemic jobs were related to government initiatives. He believes this distorted the true economic recovery.
