A U.S. recession within the year is "effectively certain," a new Bloomberg Economics model has predicted, dealing a perhaps significant "blow" to President Biden's economic platform ahead of the midterm elections.
The latest modeling from Bloomberg economists Anna Wong and Eliza Winger predicted "a higher recession probability across all timeframes, with the 12-month estimate of a downturn by October 2023 hitting 100 percent, up from 65 percent for the comparable period in the previous update," Bloomberg writes. Though not at 100 percent, the odds of a recession hitting within 11 months and 10 months also went up, having risen to 73 percent and 25 percent from 30 percent and 0 percent, respectively.
While President Biden has worked to keep the focus on strong job growth, persistant inflation and the Federal Reserve's resulting interest rate hikes have proven "a drag on Democrats' prospects in an election where polls indicate the economy is voters' top issue," Bloomberg writes. The president said recently that a "slight recession" is possible, but "I don't anticipate it."
The modeling from Wong and Winger is more confident in a recession than other forecasts, including those from Bloomberg itself, the outlet notes. Earlier this month, JP Morgan Chase CEO Jamie Dimon estimated the U.S. will enter a recession within the next six to eight months, per CNN. In September, a majority of economists surveyed by the National Association for Business Economics said they "expected the next U.S. recession will begin by the middle of next year – if it hasn't already started," CNN summarizes.