Moody's Puts Odds Of Recession At 50/50

"behind the recent jump are primarily the weak labour market numbers, but almost all the economic data has turned soft since the end of last year. Total nonfarm payroll employment edged down by 92,000 in February, and the unemployment rate changed little at 4.4 percent."

"A typical family spends about $2,000 on gas. If the price goes from about $3, where it was a month ago, to $5, the figure moves to $3,300. The median household income in the US is about $83,000. Trim that for taxes, and the figure falls closer to $70,000."

"Because oil is used for diesel, jet fuel, heating oil, and petrochemicals, the high cost of oil prices flows through the supply chain to hundreds of thousands of businesses and tens of millions of Americans. Even if it ends today, it will take weeks to get refineries back only and move oil-bearing ships back to their normal schedules."

Moody's Analytics has elevated recession probability to 49% within the next year, among the highest levels in recent years. Chief economist Mark Zandi attributes this increase to weak labor market numbers and broad economic softening across all data since year-end. February employment declined by 92,000 with unemployment at 4.4%, potentially worsening upon revision. An energy crisis compounds concerns, with oil price increases significantly impacting household budgets and supply chains. A typical family's annual gas spending could rise from $2,000 to $3,300 if prices move from $3 to $5 per gallon. Oil's influence extends through diesel, jet fuel, heating oil, and petrochemicals, affecting hundreds of thousands of businesses and tens of millions of Americans. Current supply disruptions are broader than the 2022 Russia-Ukraine crisis, and recovery timelines remain uncertain.

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