NEW YORK (AP) — Most business economists think the U.S. economy could avoid a recession next year, even if the job market ends up weakening under the weight of high interest rates, according to a survey released Monday.
Only 24% of economists surveyed by the National Association for Business Economics said they see a recession in 2024 as more likely than not. The 38 surveyed economists come from such organizations as Morgan Stanley, the University of Arkansas and Nationwide.
Such predictions imply the belief that the Federal Reserve can pull off the delicate balancing act of slowing the economy just enough through high interest rates to get inflation under control, without snuffing out its growth completely.
…
High rates work to slow inflation by making borrowing more expensive and hurting prices for stocks and other investments. The combination typically slows spending and starves inflation of its fuel. So far, the job market has remained remarkably solid despite high interest rates, and the unemployment rate sat at a low 3.9% in October.
Does this mean rent will get easier to pay, or am I still boned?
Well, according to the article:
Well, fuck.
And of course wages aren’t going to take a leap forward either.
Wages are growing on average, and faster than inflation (5.2% wage growth vs 3.2% inflation year over year for the past year). Takes two seconds to Google.
https://www.statista.com/statistics/1351276/wage-growth-vs-inflation-us/
Somewhat remarkably considering the problems with income inequality in the US, wages are growing the fastest of all among people with lower incomes (though all the wage increases in the world aren’t gonna tackle the problem of the power of the 0.1% investor class of wealth hoarders).
https://www.epi.org/publication/swa-wages-2022/
https://www.marketplace.org/2023/03/08/lower-income-earners-wages-have-grown-faster-than-others/
It’s pretty expected to given the persistent low unemployment and a high labor demand.
Not saying there’s no concerns at all in the entire economy or anything crazy. But you don’t have to spread disinformation like wages aren’t growing.
Can’t wait to be told “actually sweetie Biden fixed inflation” even though nothing actually got better. It just stopped getting worse as fast.
How would you describe ‘fixed’ inflation?
Price decreases would be deflation, but fixing inflation is literally something like stopping/slowing the rate of increase.
Normal people only really care about their own purchasing power. We care about our wages relative to the price of necessities and luxuries. Until paychecks go as far as they used to before the pandemic, normal people won’t consider the problem fixed.
Real wages, wages controlled for inflation, expressed in 1982-1984 dollars, on average have surpassed where they were before the pandemic.
Real wages in October 2023: https://www.bls.gov/news.release/pdf/realer.pdf
Real wages in December 2019: https://stats.bls.gov/news.release/archives/realer_01142020.pdf
In December 2019 it was $10.96 /hr expressed in 1982-1984 dollars. In October 2023 it was $11.05 /hr in 1982-1984 dollars.
So yes, purchasing power restored. Of course this is an average. So while most people have had their purchasing power restored, if someone is in a industry like tech that got hit hard by interest rates, they may not have experienced this. The wage gains have also been more pronounced for people with lower incomes than with higher incomes. So people with higher incomes are less likely to have seen their full purchasing power restored.
But hey our economy was nowhere near perfect in 2019 before the pandemic either. Let’s make it better by shifting focus to income inequality, reversing disastrous tax cuts made by Trump, improving our housing supply shortages, trying to find ways to effectively get the investor class to pay their fair share, etc etc. Biden’s increase of the corporate tax rate and creation of an internationally enforced corporate minimum tax to prevent tax dodging, and increased resources to the IRS to go after wealthy tax cheats are good starts, but there’s so much more to do. This inflation issue that has largely resolved now is just sucking all the air out of the room and distracting from all these other problems, many of which need local or state solutions.
Yes, that’s what fixing inflation means. I would like to know what you envision Biden doing. Decree that prices will go down? Not going to happen because there’s no mechanism for that kind of fiat.
Normal people don’t care about technical financial instruments. We care about how far our paychecks go, and they do not go as far as they did before the pandemic. Until they do, no one is going to believe inflation has been fixed. Get it?
I’m baffled that you’re getting downvotes – like… yeah. It’s a no brainer that people primarily care about their own purchasing power, and the last few years have depressed that to a shocking degree. Not one person on Earth looks at their inability to pay for groceries or rent and goes, “Well, thank God the markets are okay!”
As for what can be done? Price controls exist. Subsidies exist. The trouble with the modern world is, the wrong prices are controlled, and the wrong products are subsidized – that stuff is all tipped in favor of pouring money into the gullets of the already wealthy and powerful. And that’s a problem that could, in theory, be fixed if anyone at any level of any government gave the slightest shit about the people they serve.
Raise taxes on the wealthy. Pass rules that a certain minimum must be paid each year regardless of how many credits or deductions they have. Ban zoning. Build as many houses as can be built as fast as possible.
More fundamentally, I think there are a lot of countries that could benefit from taking a good long look at themselves and asking –
Because I think a lot of countries have just straight-up lost the plot. They’ve lost sight of, and fail to articulate, their purpose for existing, and thus squander phenomenal resources on bullshit. They live in myths and fantasies and old cultural scripts that haven’t been relevant or functional since the mid-70s.
I think honest answers to those questions would kind of horrify people – at least, they should horrify American citizens – and it might spark an actual change of direction.
The reason they’re getting down votes is because they’re making claims about purchasing power being depressed despite no data to back it up, with data from many angles showing purchasing power has been largely restored in comparison to before the pandemic, at least in the United States I should be clear. Many western countries had worse inflation than the US and have not had their purchasing power catch up again. Then it goes to “well we don’t trust the numbers we feel differently.” And how can you argue with feelings? It’s just not a productive discussion. Not to mention distracting from many other important issues in our economy. It’s not like there was a perfect economy in 2019. And it still isn’t, even with inflation slowed and wage increases largely compensating.
No facts, just vibes!
Lording economic theory over people won’t make them feel any different about their reality.
I completely agree, but if people are talking about specific elements of economic theory, then we should accurately talk about it. If we don’t hold ourselves to some kind of intellectual standard, then words become meaningless and incredibly easy to twist into fitting whatever agenda you like. A Republican could easily say that inflation has been caused by oppressive taxes and the obvious solution is to slash taxes, mostly for the wealthy of course, but with a mild tax break for the middle class to make it politically palatable. If you know anything about how inflation actually works, you’d know that this would simply make inflation even worse as consumers suddenly have a bunch of new cash to spend, further devaluing the dollar.
Sounds like vibes to me.
The fact is that paychecks do not go as far as they did before. That’s not a vibe, that’s the difference between making or missing bills.
You’re ignoring the facts that matter to score gotcha points. This is only going to piss people off even more than they already are lol
When discussing actual economic phenomena like inflation and recessions, yes, I think it is reasonable to actually be accurate and consistent in what we’re talking about.
Inflation is one problem. Wages not matching the cost of living is another, though related, problem. Saying that inflation has largely returned to normal is true, regardless of whatever else might also be true. Someone saying that is not saying that all economic woes have been fixed and that no one has any right to complain about anything.
I’m guessing you’re implying that Biden is saying that consumers need to stop whining because inflation has normalized. That would be pretty annoying, but he’s not actually said that. In fact, he just recently gave a speech blaming corporations:
https://www.cnbc.com/2023/11/27/white-house-supply-chain-bidenomics-wins.html
He’s also launched several initiatives aiming to make supply chains more robust and thus prevent future shocks from impacting prices so severely.
Naw, I’m just implying that annoying people on the internet are doing it; ostensibly people who want me to vote for Biden.
Still boned and if you’re not delighted it means you want Trump to win.
Can you explain how/why you think either Biden or Trump is related to the cost of rent? Just trying to understand your comment
Any dissatisfaction with anything in the US means you want Trump to win.
Rent and housing are under a supply crunch, unless the population stops growing, or construction speed doubles, nothing is going to drop prices.
I mean, legislation could easily drop prices. Our government reigning in unjustified price hikes would absolutely stop the unjustified price hikes.