US economy growth might slow in 2023. Why’s that?
The United States economy has been on a rollercoaster ride in recent years. The coronavirus pandemic caused severe damage to the economy. Moreover, the disruptions to global supply chains resulted in many developed countries reporting the highest inflation in 40 years.
Global central banks responded by hiking interest rates aggressively to combat inflation. Unfortunately, economists have been forecasting for months that in the United States, a recession is just around the corner.
However, reports also showed that despite these obstacles, the American economy has continued to grow, with its job market remaining strong. Furthermore, consumers are still spending, although many companies have reported layoffs, including major names such as Amazon, Walmart, Disney, General Motors, 3M, and Meta.
Still, hiring picked up in April, with the economy adding an impressive 1.2 million jobs in 2023. The jobless rate in the US is also the lowest since 1969.
The technology sector, particularly computer systems design, and services, is still rallying. Data shows significant hiring in this sector. Construction sites remain busy, as well. The authorities reported a record 7.9 million people employed in construction jobs last month. Despite all this positive data, the recession still looms on the horizon.
What do the US officials forecast?
On Tuesday, Fed Governor Philip Jefferson announced that the American economy is slowing. Still, it is happening in an “orderly fashion.” He believes that this will allow inflation to decrease even as growth continues. Jefferson added that inflation would start to come down. Consequently, the country will have the opportunity to regain its strength.
Meanwhile, on Wednesday, a new poll from Gallup showed that only 35 percent of all U.S. citizens have confidence in President Biden’s ability to bolster the economy. This is a significant decrease of five percentage points from 2022. Faith in Fed Chair Jerome Powell, as well as Republican and Democratic congressional leaders, also fell below 40 percent.
Even though the US economy is growing, and the job market remains strong, the possibility of a recession is still a genuine concern. It is essential to monitor inflation, job growth, and consumer spending carefully.
As the recent poll results demonstrate, confidence in the current leadership’s ability to handle the economy is waning, which could impact the economy’s future growth. While there is no need to panic yet, it is wise to remain cautious and prepare for any potential economic downturns.
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