"A US recession is effectively certain in the next 12 months in new Bloomberg Economics model projections … The latest recession probability models by Bloomberg economists Anna Wong and Eliza Winger forecast a higher recession probability across all timeframes, with the 12-month estimate of a downturn by October 2023 hitting 100%, up from 65% for the comparable period in the previous update."
The story ascribes the higher probabilities to "tightening financial conditions, persistent inflation and expectations of a hawkish Federal Reserve pressing ahead with rate hikes are raising the risk of a contraction.
"The model is more certain of a recession than other forecasts. A separate Bloomberg survey of 42 economists predicts the probability of a recession over the next 12 months now stands at 60%, up from 50% a month earlier."
- KC's View:
Every retailer has to be preparing now for this eventuality, not just by figuring out where the cuts will be, and not by saying things like "it is time to get back to fundamentals" (a phrase that suggests that you haven't been doing the fundamentals, which probably makes you non-competitive and certainly too late to the party).
You also have to be thinking about where the places are that you can provide your shoppers with wins, places where they will see exceptional value that transcends price. You have to be thinking about how you can continue to inspire and serve people's aspirations. You have to deal with the realities of a recessionary moment, but also thinking beyond in terms of market share and intimate shoppers connections.