Recessions Worldwide, What About the US?
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Length: approx. 1 min. 35 sec.
Two of the world's largest economies, Japan and the United Kingdom, recently reported “second consecutive negative quarters of gross domestic product”, a common indicator of a recession. Does this mean that the US economy is headed down the same route? Not necessarily.
Japan fell from the third-largest economy to the fourth, behind Germany, with the country’s GDP shrinking by 0.4% and the Yen value dropping 6.6% against the US dollar. Experts have linked this decline to the country’s steadily dropping population, which, in turn, results in low “domestic demand” and consumer spending. Meanwhile, data shows that the United Kingdom’s economy has stagnated. The country’s GDP only grew “0.1% in 2023” and had “two consecutive quarters of contraction” in 2023.
Conversely, the US economy continues to grow despite lower than predicted January sales. “Robust consumer spending”, “pandemic stimulus money”, and a lack of reliance on Russian oil has allowed the US to experience a higher than expected GDP growth. This growth, however, is expected to slow this year, but will not likely lead to a recession. Economists attribute the US economy’s resilience to its “labor market” and “personal finances”.
Despite this positive growth, there is always a risk for recession, so business owners should not grow complacent. Instead, they should always be aware of the state of the economy in order to respond accordingly. One way to stay informed and updated is by keeping up with the XQ CPA blog and following our social media. We provide business owners like you with the latest tax and business news so you can make informed decisions.
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