The U.S. could be in a ‘rolling recession,’ Schwab’s Liz Ann Sonders says
The U.S. economy may not be in a traditional recession but rather a sector-specific one that will inflict is own damage, according to Liz Ann Sonders, Charles Schwab’s chief investment strategist.
“What could happen is a rolling recession, where different pockets of the economy get hit at different times,” Sonders said Friday. “Some of the goods-side of the economy, areas that were significantly boosted by the pandemic, stay-at-home areas, those segments of the economy are clearly in recession. But it’s offset by the services side.”
Debating whether the economy is in technical recession, following consecutive quarters of negative GDP, is “academic at this stage in the game,” she added in an interview after the Bureau of Labor Statistics reported Friday that the economy added 315,000 jobs in August.
In fact, she said if the U.S. is facing recession, now would be a good time to have it.
“I’d rather it be underway now or happening soon, because that’s a pretty effective way to bring inflation down,” Sonders said. “The sooner you’re in the sooner you’re out of one.”
The economy stands at least a decent chance of avoiding a third straight negative GDP reading. Economic data for Q3 thus far is pointing to growth of 2.6% for the July-to-September period, according to the Atlanta Fed’s GDPNow tracker.
But Fed officials at this point are more concerned about slowing down inflation, which is running around its…
