COLUMBIA, S.C. (WSPA) — Economists with the University of South Carolina say a “mild” recession is likely in 2023, but South Carolina could fare better than the rest of the country.
Researchers, business leaders and elected officials met for the University of South Carolina’s 42nd Annual Economic Outlook Conference in downtown Columbia Tuesday.
Dr. Joey Von Nessen is a research economist for the Darla Moore School of Business at the University of South Carolina. He said 2023 will be a year of “re-calibration.”
“The U.S. economy basically drank a Red Bull in the form of $6 trillion in stimulus throughout 2020 and 2021,” Von Nessen said. “It has been effectively the equivalent of a caffeine high in the form of rising consumer demand. The main side effect of that is high inflation.”
According to Von Nessen, that high inflation along with rising interest rates could make a recession likely in 2023.
He said it could come down to a race between inflation and household savings.
“If consumers run out of these excess financial resources they currently have access to before inflation comes down, we’re more likely to see a recession in 2023,” Von Nessen said.
Darla Moore School of Business Research Director Dr. Doug Woodward said consumer spending and the job market remains strong so they don’t anticipate a downturn similar to what we experienced in 2007-08.
“Our outlook like the weather is cloudy right now, with a chance of showers but we’re not expecting an economic hurricane headed our way,” Woodward said.