CNN Business: The labor shortage could lead to a recession next year

Opinion by Gad Levanon for CNN Business

Over the past 12 months, US consumer prices rose by 7.5%, the highest rate in nearly 40 years. Worse, inflation is showing no signs of slowing.

The Federal Reserve typically fights inflation by raising interest rates, which slows the economy by reducing the demand for goods and services. Ideally, the rate increases are sufficient to slow inflation without leading to a recession. But the problem is that the Fed cannot precisely control the rate of economic growth. So with the central bank expected to raise rates next month, barring a major impact on the US economy from the war in Europe, the question remains: Can the Fed contain inflation without triggering a recession?

While we probably won't see a downturn this year, a recession next year is becoming increasingly likely, for a number of reasons.

https://www.cnn.com/2022/02/25/perspectives/inflation-labor-shortage-economy-recession/index.html