How The Economy Is Really Doing Right Now
The US economy is in flux, with unemployment rates low and wages high at the same time consumer and company spending is decreasing.
This article is more than 2 years old
Since the pandemic, the US economy has fluctuated in its overall prosperity. In 2021, unemployment started to diminish as workforces returned to in-person labor while job growth slowed down. Now in 2022, the New York Times detailed that unparalleled inflation rates have hindered the consumer mentality of Americans, disturbing the earnings reports of giant corporations nationwide. Though many believe a recession is imminent, some experts believe the US is doing well in some financial regions.
Various conditions combine to make a functional economy. Interestingly enough, some financial areas look better for the United States while others are drastically plummeting. After a record-high inflation rate in June, interest hikes are finally starting to stagnate that percentage. The unemployment rate and general wages are improving, too, painting a healthier financial picture for Americans.
On the flip side, retail sales, overall consumer spending, and job openings are decreasing, which are imperative to maintaining the US economy. Many massive corporations slashed their profit outlooks for 2022, noting less frequent consumer traffic and unusual overstock. This factor complicates the US economic trajectory, indicating that America remains in a precarious position.
Unfortunately, the pandemic consistently affects how the US economy and other worldwide economies function. When COVID began, it disrupted international supply chains and global exportations. Corporations are still trying to regain financial stability, while continued supply chain interruptions are harming businesses and pushing millions of people out of work. The invasion of Ukraine also threatens worldwide economic systems, accelerating the cost of oil and gas.
Many have discussed on the internet and in the news how close the United States is to another recession. Some economists already believe we’ve entered one, referring to the US’s GDP rates diminishing for two consecutive quarters. This definition of a recession is often debated, though, believing that concentrating on GDP is too reductive or simplistic. Other experts look to comprehensive tools to study an economy’s stability, like job growth, unemployment rate, and employment consistency.
Various analysts think a great way to study the US’s current economy is to analyze it through historical context. Compared to the recessions of the last 40 years, America’s economic state looks drastically different. Though the latest financial numbers indicate a period of slowing down, the statistics are less severe than the 2008 housing market collapse. For instance, the job openings rate in 2020 and 2021 is far higher than any time in US’s history when there was an economic recession.
One factor keeping the US from a financial collapse is the job market. For the most part, job openings have been abundant throughout the last year, just recently reducing in the latest fiscal quarter. At the end of July 2022, there were 11 million job openings in the country. The unemployment rate has also diminished, hitting a 50-year low this year.
With a large number of job openings, there hasn’t been a sufficient hiring pool to match. Overall hiring in America fluctuated during 2022, but last month marked an employment decline. This dichotomy between open positions and reduced available workers could lead to the next possible recession.
