KTAR News – Inflation Alone Unlikely to Lead to Recession, Phoenix Economist Says
As U.S. inflation surges to its highest level in 30 years, a Valley economist says the chance of recession is low.
“[The inflation rate] isn’t a good thing but it’s not enough to throw us into a recession,” Jim Rounds of Rounds Consulting Group in Phoenix told KTAR News 92.3 FM. “No one issue like this, inflation, could cause a recession, but if it combines with several other negative factors it potentially could.”
On Wednesday, the government said its consumer price index for October soared 6.2% from a year ago — the biggest 12-month jump since 1990. The Bureau of Labor Statistics reported consumer prices in metro Phoenix rose 2.2% over the past two months and 7.1% since August 2020.
Slammed by COVID-19, the U.S. economy collapsed in the spring of 2020 in the wake of lockdowns. Businesses closed or cut hours and consumers stayed home as a health precaution.
“Normally, the government provides some stimulus activity to fill in the holes and we move on. In this case we overstimulated everything,” Rounds said. “In this case, we probably overstimulated everything.
