An ag economics expert weighs in on the nation’s financial state. Speaking at the recent Agri-Pulse Ag Outlook Forum, the head of RaboResearch Food & Agribusiness for North America, Roland Fumasi told attendees the nation’s economy could be heading into a recession.
Source: Rabobank
“But this is our House view. Right now. We are still expecting that the US will fall into a mild recession in the fourth quarter of this year Which will continue through Q1 and then we’ll start to see a bit of a rebound,” he said. “We’re also estimating as you would expect in a recessionary type environment that unemployment does start to rise.”
However, he said that’s not the whole story.
“I would tell you that every month that goes by, and every new set of data and information point that we get our hands on, I would say that we’re getting closer and closer to saying we’re being too pessimistic on the US economy. The data just seemed to continue to sort of stack up against this. So, what does that mean? Maybe it means an actual soft landing for the Fed, right? Meaning we won’t go into any kind of recession,” he said. “Or maybe it just means that yes, we do have this light recession, but maybe it gets pushed out a quarter. That’s definitely a possibility. And again, every month it seems like it’s stacking up sort of against us because the economy continues to be so robust.”
He said the drop in Gross Domestic Product (GDP) is less than a percent, in fact about 0.4% and 0.5%, which he called “super light.”
“To put it in comparison, go back to 2008, 2009. We had a quarter back in 2008 where our GDP dropped over seven percent. When we shut down the economy essentially for the initial COVID lockdowns, we lost thirty percent,” he said. “So again, not trying to scare anybody about a recession here. [It is a] very, very light recessionary expectation.”
However, he said because of that, they do expect unemployment to rise.
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Sabrina Halvorson
National Correspondent / AgNet Media, Inc.
Sabrina Halvorson is an award-winning journalist, broadcaster, and public speaker who specializes in agriculture. She primarily reports on legislative issues and hosts The AgNet News Hour and The AgNet Weekly podcast. Sabrina is a native of California’s agriculture-rich Central Valley.