The US economy is in recession

At present, the topic surrounding the US economy and the changes in the US dollar exchange rate is a hot topic. Many Chinese analysts have a positive judgment on the US economy. They are mainly concerned about the growth of the US employment rate and average salary, and seem to have the belief that “the United States will always be strong”, which may affect their neutral and objective judgment. On this issue, a more reasonable observation perspective is to take into account the US labor participation rate. According to statistics, in December 2022, the number of adults aged 16 to 65 in the entire US population was about 264.8 million, of which the number of laborers included in the employed and unemployed population was about 165 million. The 62.3% obtained by dividing the two numbers is the labor participation rate. There are a large number of people in the United States who do not actively (referring to those who did not try to find a job in the four weeks before the statistics), some of whom are housewives, and a large number of people who have been eliminated from the labor market and have no intention of re-employment. They still belong to the labor force, but except for some consumption and work that is not counted in GDP, they will not contribute to social reproduction. The unemployment rate calculation in the United States does not include this part of the population. The unemployment rate announced by the United States in December was 3.5%, which is a relatively good figure. It shows that among the working population willing to find a job, 5.722 million still cannot find a job. If those who cannot find a job (completely lying flat) are added, it will be nearly 100 million. Only 60% of the labor force is contributing to GDP, which is a huge social unemployment burden. This situation is unimaginable in China. At least for now, there are not many Chinese workers who are really “lying flat”, especially young people. Some time ago, the youth unemployment rate reached about 20%. However, our urban unemployment rate statistics do not include all unemployed people. The difference between China and the United States is that Chinese workers have a greater demand for employment. Inflation in the United States is affected by the limited labor supply, and it is necessary to continuously improve the remuneration of employees. In other words, the so-called hot labor market in the United States is not essentially caused by the demand for rapid economic development. Our conclusion from GDP and some leading indicators is that the US economy is in recession. Moreover, the US economic community has basically reached a consensus on the prospect of economic recession in 2023.