The ‘yes, but’ economy. Yes, we’re worried about recession — but the economy remains resilient | CNN Business

New York
CNN Enterprise

Every week brings head-scratching contradictory information concerning the financial system. This previous week was no totally different, with a batch of financial reviews exhibiting that — regardless of the recession speak — the US financial system exhibits exceptional resilience.

Sure, the financial system is powerful. However it comes with loads of caveats.

Let’s assessment:

Nevertheless, these are simply substances in a murky soup of conflicting “sure, however” headlines.

Sure, shoppers say they really feel awful concerning the financial system. However a document 196 million Individuals went purchasing over the Thanksgiving weekend — and people roaring gross sales numbers weren’t simply because inflation has pushed costs larger, but in addition as a result of individuals have been making extra transactions, in response to Adobe Analytics.

Curtis Dubay, chief economist on the US Chamber of Commerce calls this “second-hand pessimism” and says the financial system may not be doing as poorly as you suppose.

Sure, inflation at close to 40-year highs is biting into household budgets. However Individuals are reserving air journey and heading to Disney parks in near-record numbers, even with larger park costs.

Sure, economists are frightened a few recession, however the job market is extremely tight with greater than 10 million open jobs and 1.7 jobs accessible for anybody who’s trying to find one (or trying to job hop).

“The labor market is extremely robust once more,” Federal Reserve Chairman Jerome Powell in a speech Wednesday. “It’s too nice, in a manner, as a result of it’s going to be including to inflation.”

So what’s subsequent?

The reality is that nobody is aware of what occurs subsequent. Forecasts have been notoriously unreliable within the post-Covid financial system. (Keep in mind “transitory” inflation?”)

The Fed has been attempting to comprise the best inflation for the reason that Eighties, jacking up rates of interest six occasions this yr and even rolling out a bumper three-quarter-point hike not as soon as however 4 occasions in a row.

Meaning the subsequent yr will no query be a problem as all that tightening continues to work its manner by the financial system.

However family funds are in higher form to deal with it, with an extra $1.7 trillion in financial savings as a cushion — though individuals will possible must dip into extra of their financial savings.

And whereas the housing market could also be cooling, it’s not crashing. After a really robust 2021, the sector is “readjusting, recalibrating,” Bess Freedman, CEO of Brown Harris Stevens, stated on CNN’s “Early Begin.”

Covid broke the financial system and placing it again collectively has been laborious to measure. Tens of hundreds of thousands of jobs have been misplaced in a single day. Faculties closed, factories shuttered, greater than one million lives misplaced. Greater than two years later, we’re nonetheless struggling to gauge the power and sturdiness of the restoration.


Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -spot_img