Likelihood of a Recession in 2023 in the United States and Europe Continues to Increase

According to IPC’s September 2022 economic outlook report, the economic picture in the United States continues to dim and the likelihood of a recession next year continues to increase. The U.S. economy is expected to expand just 1.6 percent in 2022, less than half as fast as the 3.9 percent growth projected at the start of the year. Next year, the economy is slated to expand just 0.6 percent, down from an expected 2.6 percent growth. A recession in the United States next year is not a foregone conclusion, but the probability has increased.

The picture in Europe is decidedly dimmer. The Russian invasion of Ukraine continues to put tremendous pressure on the global economy, but the impact is especially pronounced in Europe. Europe reported annual inflation of 9.1 percent in August, another new high for the continent. Moreover, pressures continue to mount and Europe will see a few more months of new inflationary highs.

“Right now, all eyes are on inflation,” said Shawn DuBravac IPC chief economist and report author. “Whereas inflation has likely peaked in the U.S., that is not the case in Europe, and likelihood of a recession in Europe next year is high. When the prospect for growth is limited, it does not take much to push an economy into recession.”

In addition to DuBravac's observations, the report also provides U.S. and European data on economic growth, employment, consumer sentiment, manufacturers’ sentiment (PMI), manufacturing capacity utilization and end markets for electronics.

View full September 2022 report. To view other industry intelligence information, visit https://www.ipc.org/advocacy/industry-intelligence.