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On today’s episode of the 5 Things podcast: Is recession coming in 2023?
Managing Director and Head of Economic Research at JPMorgan Chase Bruce Kasman considers. Plus, Dan Kennedy, journalism professor at Northeastern University and author of the blog Media Nation, looks at the investigation into Republican Congressman-elect George Santos, USA TODAY Health Reporter Adrianna Rodriguez looks back at the year in health, Southwest Airlines expects to resume normal operations, and Pelé has died at 82.
Podcasts: True crime, in-depth interviews and more USA TODAY podcasts right here.
Hit play on the player above to hear the podcast and follow along with the transcript below. This transcript was automatically generated, and then edited for clarity in its current form. There may be some differences between the audio and the text.
Taylor Wilson:
Good morning. I’m Taylor Wilson and this is 5 Things you need to know Friday, the 30th of December, 2022. Today, how close are we to a recession? Plus an investigation into campaign lies by an elected congressman, and we remember Pelé.
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With the Fed rate hike inching toward 5% to try and tame inflation, Americans are wondering what the economy in 2023 will look like. Producer PJ Elliott talked to Bruce Kasman, the Managing Director and Head of Economic Research at JPMorgan Chase to find out if we’re headed towards a recession in the new year.
PJ Elliott:
So, Bruce, thanks for joining 5 Things.
Bruce Kasman:
Sure.
PJ Elliott:
Let’s start with the biggest question on everyone’s mind. Are you anticipating a recession in the new year? And if so, when and how bad might it get?
Bruce Kasman:
Our economic view is based on effectively three ideas, and the first one is that we don’t think we’re going into recession as we turn into 2023. That’s not to say the economy isn’t struggling with higher interest rates and with some pretty severe weakness in China and in Europe right now. But we actually think there’s some good things happening as we’re fading some of the very powerful supply side drags that hit us earlier this year from rising commodity prices, and from pandemic related problems at supply chains. That’s a big reason why inflation is falling right now. And the combination of that decline – and a couple of other good things happening, government spending’s picking up and the underlying resiliency of the private sector, which I think is a big theme – is I think keeping the economy afloat. So, that’s the first thing I would say.
The second thing is we don’t think we’re on a sustainable path. And that is to say that inflation is coming down, but I think the inflation process has changed and the Fed is not likely to get inflation back well below 3%, given how tight labor markets are, given how the pandemic has created lingering effects on psychology, lingering effects on supply chains. And as a result, I think at some point here we are going to need to see a Fed-engineered, either intentionally or by accident, economic downturn.
And the third point I just would want to make is I think it’s hard at this point, and I don’t want to be intentionally vague, but I think it’s hard at this point to be very confident in terms of the timing of when the next recession is going to hit and under what path of rates that’s going to deliver. Our baseline view is that we do go into recession at the end of 2023, and I think the Fed, again, raising rates to 5% or higher becomes a catalyst for that. But I think there’s a number of different paths we can follow here some with higher rates, some with a longer timeframe before the economy goes down.
PJ Elliott:
Do you expect job growth to continue?
Bruce Kasman:
Well, recessions by nature are events in which jobs are being shed in a significant way. So, the near term forecast that the economy is not sliding into recession is a forecast that job growth continues. We’ve been running rather robust job growth. Labor market remains quite tight. I think there’s some cooling taking place here, but I think job growth, staying somewhere in the hundred to 200,000 range over the next three to six months is a reasonable forecast for what the economy will deliver.
PJ Elliott:
What can people do to plan for changes in the economy if the recession does come at the end of 2023? What can people do to plan for that?
Bruce Kasman:
Well, I think the most immediate thing is to recognize that there is going to be recession at some point in the future. Recessions do damage to labor markets, they do damage to balance sheets in terms of wealth and we’re seeing that already in terms of equity prices go down and we’re likely to see that in terms of home prices begin to fall. So, I think just being on a more cautious footing in preparation of that event makes sense. I think beyond that, the timing of this story, how far rates have to go to deliver it does matter in terms of how people make decisions on investments. And I think that’s where I want to emphasize. There are multiple paths we may follow and it’s not obvious what the right steps to take are.
PJ Elliott:
As you know, China experienced the devastating surge in COVID cases, or they’re experiencing it right now. Are you anticipating a return of supply side issues?
Bruce Kasman:
I think there are going to be some supply side problems in the next few months as China has pulled off the bandaid and is going through a full fledged immunity rise as people are getting cases of COVID quite dramatically here. But we do think the bigger impact in terms of the global economy and spillovers is actually going to be demand weakness. And I think it is going to show up in a more sharp fallen US inflation, particularly goods price inflation. It’s going to contribute to limiting where commodity prices, particularly energy prices go in an environment in which some other things, geopolitics of the supply side developments actually would suggest prices are higher.
And we are hoping that in a horizon of about three or four months, China will have worked its way through this and will start to show actually strong growth both improving supply side and demand side conditions and actually start to become something of a reflationary impulse in terms of what the global outlook is. But for the near term, we’re not ignoring supply side problems, we don’t think they’re going to be severe, and we do think the demand side weakness in China is the bigger immediate event.
PJ Elliott:
Bruce, thanks so much for your time. I really appreciate it.
Bruce Kasman:
Sure. Thank you.
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Taylor Wilson:
Federal prosecutors in New York are launching an investigation into Republican Congressman-elect George Santos after revelations that he lied about key parts of his biography on the campaign trail, according to reports. Earlier this month, the New York Times reported that Santos never earned degrees from Baruch College and New York University despite claiming during his campaign that he had. In addition, Santos also misrepresented his Jewish heritage and previously said he worked for Citigroup and Goldman Sachs. But neither company could find any records verifying that according to the Times.
But why didn’t anyone notice until after Santos was elected? Producer PJ Elliott spoke with Dan Kennedy, a journalism professor at Northeastern University and author of the blog Media Nation, to find out the answer.
PJ Elliott:
Dan, thanks so much for hopping on with 5 Things.
Dan Kennedy:
Thanks for having me.
PJ Elliott:
Let’s begin here. How did the whole thing with George Santos lying about his resume happen and go unnoticed?
Dan Kennedy:
Well, that’s a really good question, and a lot of people have attributed this to a failure of local news. And I have to tell you, I certainly believe that there is a crisis in local news. It’s something that I write about and research all the time. But in this particular case, there was a weekly newspaper in his district called the North Shore Leader that managed to get some of the story out several weeks before the election. And how this went unnoticed by larger media is really a mystery to me.
PJ Elliott:
What about the GOP and the Democrats? Aren’t they to blame a little bit here for either one of them not looking into the background of Santos?
Dan Kennedy:
Oh, for sure. I mean, from what I have seen in the reporting, Santos’ Democratic opponent, Robert Zimmerman, his campaign did do some opposition research, but it was really just the usual. It was like Santos is a MAGA Republican, he supports Donald Trump. But the opposition research really missed the larger picture here. And, of course, the Republicans took no action to prevent Santos from winning the nomination.
PJ Elliott:
Obviously, we’re in one of, at least in my lifetime, the most divisive time I’ve ever seen. How can the people trust any candidate after what happened here?
Dan Kennedy:
Well, that’s a really good question. I mean, I’d like to think that George Santos is an extreme outlier. I’ve been around a long time. I think I’ve been around longer than you have PJ and I have never-
PJ Elliott:
I am 40, I’ll say that. I might look young, but I am 40.
Dan Kennedy:
Well, I am 66, so there you go. I have never seen a candidate who has lied the way George Santos has lied, and I don’t think that we should assume that this is standard operating procedure for political candidates. But I do think that the one lesson to take away here is that the parties, themselves, need to pay more attention to who’s being nominated. In this particular case, all that larger news organizations had to do was have an intern on the city desk who looks at the local weekly papers in the area and they would’ve come across this and said, “Hey, this is really interesting. It looks like it bears further investigation.” And that didn’t happen in this case.
PJ Elliott:
Dan, thank you so much for your time. I really appreciate it.
Dan Kennedy:
Thank you, PJ. I appreciate it as well.
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Taylor Wilson:
It’s been quite a year in the world of health. Years after the start of the COVID-19 pandemic, subvariants of the virus are still causing problems. But there’s been a greater focus on mental health and health inequities continue. For more on some of the biggest stories of 2022 USA TODAY Video Producer Sonu Trivedi caught up with USA TODAY Health Reporter Adrianna Rodriguez.
Sonu Trivedi:
Welcome.
Adrianna Rodriguez:
Thank you for having me.
Sonu Trivedi:
So, 2022 felt like a pretty big year for health stories. What were some of the most pressing health stories or topics for the health team this past year?
Adrianna Rodriguez:
Yeah. Health, just like the other past two years, since the pandemic has been really on the forefront of everybody’s mind. I mean, obviously, we could definitely say with confidence that the pandemic is still one of the biggest topics that our readers are interested in, just because this year we had the rollout of the bivalent vaccine, which targets both the BA.4 and BA.5, subvariants of the omicron variant. We also had that big omicron wave right at the start of the year.
Sonu Trivedi:
Are there any other health stories besides COVID that you think were pretty prevalent throughout this past year?
Adrianna Rodriguez:
Absolutely. I think some things that really got attention this year, one was the opioid epidemic. Obviously, it’s something that had existed prior to the pandemic, but it seems like the pandemic had really brought to the forefront all of the health issues that were exacerbated by the virus or by the conditions created by the virus. So, the opioid epidemic was one in substance use disorder, in general, was at the forefront of reader’s minds looking at what the administration is doing and how bad it’s getting after all these years, decades worth of issues going on there.
Also, the mental health crisis. Obviously, the COVID pandemic had a real effect on mental health of workers, of people who had to be locked down, but also especially on our youth.
I would say the final biggest issue that people are reading about more is about the health disparities. This obviously has existed for decades and before the pandemic, but it’s come to the forefront of everybody’s mind because the pandemic had really exacerbated those health disparities and really shed light on them.
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Taylor Wilson:
Southwest Airlines expects to resume normal operations today after canceling more than 10,000 flights over the past four days. Southwest said it was fully staffed and prepared heading into the Christmas holiday weekend, but severe weather around the country forced operational changes and the airlines struggled to recover. Many travelers are still trying to rebook flights and track down luggage. Unclaimed bags have piled up at airports around the country and Southwest has created an online form travelers can fill out to help find their bags. The Department of Transportation and the Senate Committee on Commerce, Science, and Transportation are looking into this week’s cancellations. And President Joe Biden said he would hold airlines accountable.
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Pelé has died. The Brazilian soccer legend won a record three World Cups and is widely considered one of the great players of all time. He was jointly named FIFA’s Player of the 20th Century, along with Argentina’s Diego Maradona. Pelé’s fast fluid style exemplified o’jogo bonito, Portuguese for the beautiful game and a phrase that has come to be synonymous with how Brazilians have played for generations since.
Pelé transcended soccer becoming its first true global superstar. He was knighted by Britain’s Queen Elizabeth II. And he helped grow the game in the US, drawing huge crowds when he played his later years for the New York Cosmos in the 1970s. When he later visited President Ronald Reagan, the president said, “My name is Ronald Reagan. I’m the president of the United States of America, but you don’t need to introduce yourself because everyone knows who Pelé is.”
Pelé was Brazil’s first modern Black national hero in a country where the white minority often makes up much of the rich and powerful. After soccer, his life took many forms: politician, businessman, and a goodwill ambassador for UNESCO. He died yesterday of organ failure in São Paulo after a number of health issues, including colon cancer. Edson Arantes do Nascimento, better known as Pelé, was 82 years old.
Thanks for listening to 5 Things. You can find us every morning of the week right here, wherever you’re listening right now. I’m back tomorrow with more of 5 Things from USA TODAY.
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