The drumbeat of warnings of an approaching recession continuousBut fears of hitting the United States in 2023 are starting to fade. There is evidence that the economy is improving, and the United States may avoid significant contraction After all.
Business Insider quotes Mark Zandi, chief economist at Moody’s Analytics, who said: “Inflation is on its heels.” According to Zandi, moderate inflation makes it less likely that the Fed will raise interest rates, which in Zandi’s view “significantly increases the odds that the economy can survive a recession in 2023.”
Positive signs include a decline in the consumer price index (CPI), which fell for six consecutive months through December, indicating weak inflation. Then there is the job market, which remains strong. Here’s more from Business Insider:
At the same time, the US labor market considered the possibility of a recession and basically ignored it. Workers continue to feel comfortable leaving their jobs at near-record rates, and the layoff rate remains near a record low. The US added 223,000 jobs in December, well above the 200,000 jobs forecast by economists surveyed by Bloomberg – and the unemployment rate fell to 3.5%, below expectations of 3.7%…
The good news about jobs continued Thursday, BI reports, and The unemployment Claims fell sharply at the end of December.
Other economists agree with Mark Zandi’s positive view. BI quotes ZipRecruiterChief Economist, Sinem Popper, who wrote in a statement Thursday that looking at CPI data alongside “recent labor market indicators” shows an increased “potential for a soft landing.”
head of the Federal ReserveJerome Powell, indicated earlier that he is not sure of an economic downturn in 2023. However, continued positive developments will make it possible for the Federal Reserve to maintain its ultimate goal of price stability, and to stave off recession.
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