As many debate the chances of a recession, Yahoo Finance markets reporter Josh Schafer breaks down what recent economic data tells us.
- All right. Now, the question is, will we enter a recession or not? That question on just about everyone's mind since the Fed started aggressively hiking rates. Plenty of economists and analysts we have on Yahoo Finance have forecast a recession for some time this year. But the more data we get, the more it seems like the economy could remain resilient amid high inflation. Here with more on this is Yahoo Finance's own Josh Schafer.
JOSH SCHAFER: [INAUDIBLE] What's been interesting is this data has started to come in even just this morning with the PCE data--
- PCE, mm-hmm.
JOSH SCHAFER: --more and more people are still projecting that recession but pushing it out a little bit further. So Oxford Economics, who we speak with a lot here at Yahoo Finance and are constantly quoting, now saying they see that recession that they saw in Q3 out into Q4. And when you take a look at the data as a whole that we saw this week, you saw GDP move up, right? We thought it was 1.1% growth in the first quarter. Turns out it was 1.3% growth in the first quarter.
When you take a look at jobless claims and what we've seen from that fraudulent data in Massachusetts now that they've fixed that problem, there's actually less people filing jobless claims than we initially anticipated. And then sort of you spin that forward, right, and you think, well, what does that mean for the Fed rate hike path, and how has that been priced in?
Guess what? Take a look at the CME FedWatch Tool this morning. People are now pricing in a June hike. We've been talking about this for a couple of weeks now. That was nearly opposite the other way going back a couple of weeks ago, so it's been interesting to see how this data is sort of starting to push things into are they going to hike in June or is it to pause? And then a potential hike in July too because we got that jobs report next week of course.
- Right. Exactly. I mean, the assumption is, if we are going to have a recession, they would not be going in that direction.
JOSH SCHAFER: Right.
- Or at least if we're in recession. Thanks so much, Josh. Appreciate it.