How The US Economy Is Faring Today

The US economy had its ups and downs in the last few years. Today, the economy is in a strange place. Job growth is slowing down while the worker demand is as strong as ever. Inflation is rising to high values, but still not close to what it was last spring. When we observe consumer behavior, they seem to be spending more in certain areas while cutting down expenses greatly in others. Job openings are high, and the layoffs are low.

We cannot exactly pinpoint what a good number of jobs or rate of wage growth is. But when analyzing the financial data from this year, we can say that the economy is doing well overall but slowing down. The US economy has 150 million workers and $20 trillion worth of annual output, which makes it hard to understand what is happening at a given time. The ripple effects of the Covid pandemic are still keeping millions of Americans out of work. The gas and food prices have spiked due to the war in Ukraine. The attempts of the Federal Reserve to fight back against fast inflation are threatening to cause a recession.

The gross domestic product has dropped for two consecutive quarters, indicating that the US is in a recession already. If we compare the current numbers with past recessions, the situation at present is more of a slowing down economy, rather than a full-blown recession.

The job market is doing well at present with nearly six million jobs added in the past year. The unemployment rates are at a 50-year low. By the end of July 2022, there were more than 11 million job openings. Though these numbers are high, the percentage of adults working or looking for employment is still below that of the pre-pandemic years. This explains the complaints of employers saying they can’t find enough workers.

The number of layoffs began to rise, as indicated by the filings for unemployment claims earlier in the year. By September, that too has slowed down. The worker wages are rising significantly for two years now. The hot labor market has given the bargaining power of wages and salary demands to the workers. the income through businesses and investments is also rising. But the problem is the rising prices of almost everything.

When tallying with inflation, despite the rising wages, a sizable number of individuals are falling back on their buying power. Inflation is the highest it has been in 40 years, although it has slowed down a little in the past two months. We cannot be sure how long the slowdown of inflation rates will last. The average hourly earnings are not increasing as fast as consumer goods prices. Even without adjusting for inflation, wage gains have begun to slow down. This suggests that the bargaining power of workers might be dipping down.

whatever the economic indicators say, Americans are feeling poorly about the current economic state. Consumer sentiment is lower than what it was before the pandemic. Consumer spending accounts for almost 70 percent of the GDP. When people slow down their spending, the economy will have a tough time of things. The spending increased during the pandemic when people were at home but is now starting to decrease as everyone is starting to go back to work.

The housing sector is already showing signs of a recession. With the interest rate spikes of the Fed earlier in the year, construction work has begun to slow down. Builders are simply reducing construction. A good number of potential buyers are also withdrawing from the market.