The article does not suggest the US economy will be booming within the year, rather that the FED may be able to orchestrate a "soft landing" without having the economy reverse, and without having a major increase in unemployment. There will still be many people who have to go through hard times, but it will not be as widespread as in a typical recession.
The article interviews Alan Blinder, a Princeton University economist who was a former vice chair of the FED, who states that "The most positive sign... is the ongoing slowdown in inflation. It has dropped from a peak of 9.1% in June to a still-high 7.1% in November." This is due to a multitude of factors, including the price of gas becoming more affordable and supply lines finally reverting back to form. Last year in mid-June, the price of gas was $5, now it's $3.27.
The price of used cars, furniture and clothing have all dropped within the past few months as well. The article does state some of the reasons the US may dip into a recession, from businesses becoming anxious, political incompetence, and China's economy reopening and buying large sums of oil, which may raise oil prices in the US.
Article: https://apnews.com/article/inflation-business-compensation-and-benefits-economy-728bf4d2efd02b20de28db3e01ed25ba
Article: https://apnews.com/article/inflation-business-compensation-and-benefits-economy-728bf4d2efd02b20de28db3e01ed25ba
This sounds very encouraging, hopefully the article is correct and with continued lowering of inflation a major recession can be avoided.
ReplyDeleteHopefully this optimistic article about the future of the economy can help to stop or at least ease an upcoming recession like how a article saying a recession is imitate can influence people to lower spending and can push the recession harder.
ReplyDeleteThere is a lot of talk about the FED trying to navigate a "soft landing" for our economy, but historically speaking they have not been too good at this. Although this article does point out some positive signs of an improving economy, many have noticed indicators of a recession coming such as an inverted yield curve for the interest rates of 10 year treasury securities and 2 year treasury securities. I'm interested to see if the FED will truly be able to pull of this soft landing this time.
ReplyDeleteIf everything goes smoothly, I believe it will be highly beneficial for both the economy and the people. Based on this article, it appears that the Fed is making every effort to avoid going into recession, and even if we go into recession, the impact on everyone will be minimal.
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