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Jittery Investors Have Overplayed The Threat Of A Us Recession Economists Say But Years Of Bumper Growth Are Over As The Worlds Largest Economy Slows

Recession fears grip markets, but economists say it's not inevitable

Jittery investors have overplayed the threat of a US recession, economists say, but years of bumper growth are over as the world's largest economy slows.

An unexpectedly weak US employment report featuring a post-pandemic high in the jobless rate has rekindled worries a recession may be looming, sending stock markets plunging.

But economists say it's too early to panic. The US economy is still growing, albeit at a slower pace than in recent years. And while the risks of a recession have increased, they are still relatively low.

"We are not in a recession now," said Claudia Sahm, a former Federal Reserve economist who now works at the Brookings Institution. "The economy is still growing, and there are no signs of a broad-based decline in economic activity."

Sahm said the weak jobs report was likely due to temporary factors, such as the Omicron variant of the coronavirus and the end of the government's expanded unemployment benefits.

Other economists agreed that the risk of a recession is low. "The economy is still growing, and there is no evidence of a widespread decline in business activity," said Mark Zandi, chief economist at Moody's Analytics.

However, economists did warn that the risks of a recession have increased. The Federal Reserve is raising interest rates to fight inflation, and that could slow economic growth. And the war in Ukraine is also creating uncertainty and could lead to higher energy prices.

For now, though, economists say it's too early to panic. The US economy is still growing, and the risks of a recession are still relatively low.


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