Ex-Commerce Secretary Predicts Impending Recession for the US

Former Commerce Secretary Wilbur Ross has cautioned that a U.S. recession is on the horizon, driven by the lasting impact of pandemic-related stimulus measures. Although Wall Street remains more upbeat, highlighting robust GDP growth and low unemployment rates, Ross contends that the economy was temporarily boosted by the $5 trillion in stimulus funds. He cites rising inflation, elevated consumer prices, and an excessive dependence on government employment as signs of an approaching recession.

Wilbur Ross Predicts U.S. Recession

In an interview with Bloomberg last week, former Commerce Secretary Wilbur Ross warned that the U.S. is heading toward a recession due to the lingering economic impact of pandemic-related stimulus. Ross' outlook contrasts with the more optimistic stance on Wall Street, where many analysts believe the U.S. can avoid a recession as GDP continues to grow and unemployment stays low.

However, Ross remains pessimistic, arguing that the economy is now experiencing a decline from an artificially boosted state. He attributes the impending recession to the government’s pandemic response, especially the $5 trillion in stimulus measures.

He further highlighted that most of the stimulus funds were quickly spent by Americans, causing a surge in demand without a matching increase in supply, which he identified as a key driver of inflation.

Ross also pointed out that the strength of the labor market was partly inflated by a rise in government jobs, estimating that around 30%-40% of the jobs created post-pandemic were tied to government initiatives. He believes this has distorted the perception of true economic recovery.

Since then, the job market has cooled as stimulus efforts have diminished and the Federal Reserve has aggressively raised interest rates. While many economists continue to argue that the economy remains stable, investor confidence is declining.