The US economy is in an overheated state, with declining manufacturing activity, high everyday prices, and a tight labor market, causing Americans to feel a significant cost of living crunch and prompting a warning that they should "hunker down" and be cautious with their finances, according to global economist Nancy Lazar. Excessive government spending is blamed for the high prices, and an impending recession is expected to add further pressure on all wealth groups. To achieve economic recovery, Lazar emphasizes the importance of private sector-driven growth and the need for reduced government spending and entitlement reform.
The U.S. economy continues to grow above-trend, consumer spending remains strong, and the labor market is tight; however, there are concerns about inflation and rising interest rates which could impact the economy and consumer balance sheets, leading to a gradual softening of the labor market.
Inflation is causing a decline in affordability for average working individuals, with prices on everyday necessities such as groceries, gasoline, and housing rising significantly in the past two years due to government spending and the Fed's money-printing.
The latest results and forecasts from retailers indicate that U.S. consumer spending is under stress due to increased living costs and existing debts, posing challenges for the retail sector during the back-to-school and holiday seasons.
The US economy is growing rapidly with favorable conditions for workers, but despite this, many Americans feel pessimistic about the economy due to inflation and high prices, which are driven by complex global forces and not solely under the control of President Biden or Trump. Housing affordability is also a major concern. However, the Biden administration can still tout the economic recovery, with low unemployment and strong economic growth forecasts.
Despite signs of declining U.S. inflation, a majority of Americans, particularly those living in rural areas, are experiencing higher grocery prices under President Biden's economic policy, known as Bidenomics. Concerns about inflation and reliance on partisan news contribute to the perception of economic challenges, despite reports of a strong U.S. economy.
Employment growth in the US likely cooled and wage increases moderated in August, reducing the urgency for another interest-rate hike by the Federal Reserve and tempering inflation risks.
The US jobs data for July suggests a cooling employment market, with a drop in labor demand and easing of hiring conditions, which could help lower inflation without a significant rise in unemployment rates.
Consumer prices in the US rose 0.2% from the previous month, and 3.3% annually, indicating persistent high inflation and posing a challenge to the Federal Reserve's efforts to curb it; core prices, which exclude food and energy, also increased 0.2% from the previous month and 4.2% from the previous year.
The U.S. economy may achieve a soft landing, as strong labor market, cooling inflation, and consumer savings support economic health and mitigate the risk of a recession, despite the rise in interest rates.
U.S. consumer spending increased in July, boosting the economy and reducing recession risks, but the pace is likely unsustainable as households dip into their savings and face potential challenges from student debt repayments and higher borrowing costs.
The US job market is cooling down, with signs of weakening and a slowdown in momentum, which may allow the Federal Reserve to ease inflation pressure through weaker job creation and reduced demand.
The US added more jobs than expected in August, but the unemployment rate increased, indicating a looser job market and potentially relieving concerns about a hot labor market contributing to inflation.
Americans are expecting high inflation to persist over the next few years, with a median expectation of 3.6% one year from now and estimates of around 3% three years from now, according to a survey by the Federal Reserve Bank of New York. This suggests that sticky inflation may continue to be a concern, as it surpasses the Fed's 2% target. Consumers also anticipate price increases in necessities such as rent, gasoline, medical costs, and food, as well as college tuition and home prices.
Consumer spending in the US is showing signs of cooling, with retail sales expected to slow down in August, indicating that the resilience of the consumer may be waning due to increased borrowing, depleted savings, and the impact of inflation.
Despite claims by the Biden administration and corporate media that inflation is decreasing, the latest consumer price index from the Bureau of Labor Statistics shows that Americans paid 3.7 percent more for basic consumer items in August compared to the previous year.
U.S. retail sales rose more than expected in August due to higher gasoline prices, but underlying spending on goods slowed as Americans faced increased inflation and borrowing costs, while the trend in underlying spending on goods was not as robust as initially thought in July. Despite this, overall consumer spending is expected to remain strong, driven by spending on services.
The US economy shows signs of weakness despite pockets of strength, with inflation still above the Fed's 2% target and consumer spending facing challenges ahead, such as the restart of student loan payments and the drain on savings from the pandemic.
American workers are facing a decline in median annual household income due to high inflation, with 17 states experiencing a decrease while only five saw an increase, according to data from the Census Bureau. The labor market remains challenging, with wages rising but not enough to keep up with inflation.
Americans are facing persistent inflation and a high cost of living, but elite economists and academics are disconnected from the reality and dismissive of the struggles of everyday Americans.
The retail, leisure and hospitality, and accommodation and food services industries experienced wage growth that outpaced inflation due to the high demand and staffing shortages after the pandemic, but there are no guaranteed inflation-proof industries, and it is important for individuals to focus on securing jobs that offer upward mobility and higher income to keep up with inflation.
The U.S. economy is experiencing a higher share of working-age people in the workforce than ever before, and despite some inflationary concerns, the country is not at risk of a recession, according to economist Betsey Stevenson.
