US Economy Defies Predictions, But Challenges Remain in 2023
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The US economy proved resilient in 2022, avoiding the widely expected recession and seeing strong growth and low unemployment. However, the Fed will likely cut rates in 2023 to prevent a potential downturn.
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Inflation remains high compared to pre-pandemic levels. This is causing "sticker shock" and negative consumer sentiment, even though the economy is strong overall.
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Consumers are spending freely on services like travel and durable goods now that pandemic restrictions have eased. Airlines have seen record travelers while spending shifts from services to durable goods.
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The national debt will continue climbing over the next decade, requiring eventual tax hikes and spending cuts. But the current debt level isn't yet at crisis levels.
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The red-hot job market has cooled somewhat. It's now harder for workers to switch jobs and get big raises compared to 2021 and early 2022.