US recession in 6 months? PwC survey’s shocking revelation on economic turmoil sounds alarm

Is the US economy headed for a recession? PwC’s latest “Pulse Survey” showed that 61 percent of executives polled they expect to see the US economy fall into a recession over the next six months. What is worrying is that this figure is up from 49 percent in the June report. The jump occurred despite the Federal Reserve’s recent interest rate cut and data showing inflation falling.

“PwC’s October 2024 Pulse Survey shows that executives see economic, political and regulatory risks no matter who wins the 2024 US presidential election. Consider the overall economy. Despite the Federal Reserve’s recent interest rate cut and falling inflation, 61% of respondents agree that the US economy will experience a recession in the next six months, up from 49% in our June 2024 survey,” the report reads.

ALSO READ: Is recession on the cards in US? World’s largest alternative asset management firm CEO says…

The executives have cited US economic policy as the biggest risk under either presidential candidate- Kamala Harris or Donald Trump- the report says. Moreover, executives are wary about key policies from both candidates, it adds.

“Seventy-five percent agree or strongly agree that a 10% universal tariff on imports (as proposed by Trump) would significantly hinder their growth, and 75% agree or strongly agree that they would significantly reduce their domestic investments if there were a US corporate tax rate of 28% (as proposed by Harris),” according to the PwC pulse survey.

Recession risk remains high in US

While the key findings of the report suggest that recession risk remains high, cyber threats continue to top the list of business risks. Despite falling interest rates, 61% of executives surveyed see a potential recession in the next six months. The report attributes this fear to geopolitical tensions, concerns about a slowing labour market, uncertainty about the election, a distracted electorate and consumers still squeezed by higher costs are contributing.ALSO READ: ‘Extremely bad’ recession in US soon? A warning from investing guru Jim Rogers “Although executives are worried about other factors — such as profit pressure, geopolitical tensions, new legal and reputational risks related to artificial intelligence (AI) — cyber threats remain the top business risks, cited as a moderate or serious risk by 75% of executives in our survey,” the survey mentions in its key findings.

71 percent of executives say that trade and tax policies will hurt US competitiveness regardless of who becomes president, it says. There are some differences though. Executives see higher taxes and climate as policy risks under Harris, trade and foreign relations as policy risks under Trump.

When asked which government entities affect their company most, more than half (53%) rank state governments and federal regulatory agencies (52%) in their top 3. Those were followed by local governments (44%) and Congress (43%) — all ahead of the president.

ALSO READ: Jobs at risk? Sundar Pichai’s comment raises alarm for software engineers

According to PwC pulse survey, 76 percent of executives anticipate a divided US government.

The US economy grew solidly in the three months to September, expanding at an annual rate of 2.8%. Despite there being a slight slowdown from the prior quarter’s 3% rate, the figures released by the Commerce Department showed the US is on track for one of the strongest economic performances of any major economy this year.

Consumer spending was the biggest driver, picking up from earlier in the year. The report arrives days before polls close in America’s hotly contested presidential election, in which surveys have consistently indicated the economy is Americans’ top concern.