Nueva York (Trends Wide Business) — A new Trends Wide poll shows that three-quarters of likely voters believe the US economy is in a recession. It probably isn’t, but that’s not the point.
Technically, a recession is declared when there are two consecutive quarters of economic contraction, a situation that the US economy presented in the first half of the year. But this is the United States, and we do things differently from the rest of the world: here economists accept that the country is in a recession only when an obscure and elite panel of experts determines that economic activity has suffered a general and significant decline during more than a few months. It is difficult to argue that this has happened, which we will explain below. And the US economy recovered relatively well in the third quarter.
Still, most Americans are uncomfortable with the economy heading into next week’s midterm elections. And for good reason.
Inflation
Consumer prices have been red hot for more than a year.
What began with supply chain disruptions caused by the global pandemic, and worsened by Russia’s war in Ukraine, has morphed into a more pervasive problem, causing Americans to pay more for everything. From vegetables to vet bills.
The Consumer Price Index (CPI), which measures inflation based on a series of commonly used goods and services, reached a four-decade high in June, 9.1%. The latest reading shows prices have cooled slightly to 8.2%. But this figure is still the highest since the early 1980s, and it is the first time that many young people have experienced inflation.
“Inflation has become something of a cancer,” Christopher S. Rupkey, chief economist at FwdBonds, said in response to the September CPI report. “It’s spilling over into services, where it’s going to be much more persistent, much more stubborn, much more difficult to get those prices down.”
People walking in Chicago on October 14. Credit: Jakub Porzycki/NurPhoto/AP
Employment
The labor market is a bright spot in the US economy, with unemployment at its lowest level in half a century. And wages have risen, on average, more than 5%.
For workers looking for better pay or benefits, now is a good time to negotiate or look for a new job. For hiring managers, the story is different.
There are nearly two jobs available for every job seeker, which is a boon for job seekers but a concern for the Fed, since that drives up inflation when bosses pay more to compete for talent. .
And this week more good news is expected: the US economy continues to create jobs. The October jobs report, due out this Friday morning, is expected to show that 200,000 jobs were added last month, well above the pre-pandemic average.
A “Hiring” sign is displayed in a store window on October 21 in New York City. Credit: Leonardo Munoz/VIEWpress/Corbis News/Getty Images
gasoline prices
Gas prices are notoriously volatile, and they tend to weigh heavily on voters’ minds, yet there is little a politician can do to influence prices at the gas station one way or another.
This has made for a very eventful year, with US gas prices soaring to a record average of $5 a gallon over the summer. Since June, prices have dropped significantly, down to about $3.78. But it may not be enough for Democrats to endear themselves to voters, given the high cost of all other necessities.
Just a week before voters go to the polls, President Joe Biden tried Monday to direct popular outrage at oil companies, whose skyrocketing profits have prompted some on the left to call for an extraordinary tax. .
“The current record profits are not because they are doing something new or innovative. Profits are a windfall of war,” Biden said. “It’s enough”.
A man fills up his car at a gas station in Carson, California, on September 22. Credit: Etienne Laurent/EPA-EFE/Shutterstock
food prices
Food prices are hitting Americans hard, rising 11.2% in the year to September. This is an even more pronounced increase than that of general inflation. Restaurant prices are up 8.5% and grocery store prices are up 13%.
But some supermarket staples have risen even more in the past year: Eggs are up 30.5%; butter, 26.2%; and flour, 24.2%, according to data from the Bureau of Labor Statistics. A handful of food items, such as beef and tomatoes, saw declines from a year earlier.
Several factors have contributed to these higher costs, including the war in Ukraine, drought and other extreme weather conditions, and a deadly bird flu that hit poultry supplies.
But all this is of little comfort to Americans who have had to change the way they eat as well as switch to store brands and cut back to stay on budget. And there may not be much relief in time for the holidays. A recent report from market research firm IRI estimates that a typical Thanksgiving meal will cost 13.5% more this year compared to last.
A customer shops at a Washington supermarket on Oct. 28. Credit: Ting Shen/Xinhua/Getty Images
Mortgage interest rates
Home ownership is at the least affordable level since the mid-1980s.
Mortgage interest rates for a 30-year fixed-rate loan reached 7% earlier this year, and home prices remain just below their recent all-time highs, driving many would-be buyers out of the market. . Rents are cooling off from their peak but are still rising by double-digit percentages from a year ago in many cities.
Inventory remains tight as homeowners who locked in ultra-low interest rates over the past two years by buying a home or refinancing are reluctant to give up their low monthly payments by moving. And this threatens to keep home prices out of reach for many Americans.
— Alicia Wallace, Anna Bahney and Danielle Wiener-Bronner contributed reporting.
Related Post
Nueva York (Trends Wide Business) — A new Trends Wide poll shows that three-quarters of likely voters believe the US economy is in a recession. It probably isn’t, but that’s not the point.
Technically, a recession is declared when there are two consecutive quarters of economic contraction, a situation that the US economy presented in the first half of the year. But this is the United States, and we do things differently from the rest of the world: here economists accept that the country is in a recession only when an obscure and elite panel of experts determines that economic activity has suffered a general and significant decline during more than a few months. It is difficult to argue that this has happened, which we will explain below. And the US economy recovered relatively well in the third quarter.
Still, most Americans are uncomfortable with the economy heading into next week’s midterm elections. And for good reason.
Inflation
Consumer prices have been red hot for more than a year.
What began with supply chain disruptions caused by the global pandemic, and worsened by Russia’s war in Ukraine, has morphed into a more pervasive problem, causing Americans to pay more for everything. From vegetables to vet bills.
The Consumer Price Index (CPI), which measures inflation based on a series of commonly used goods and services, reached a four-decade high in June, 9.1%. The latest reading shows prices have cooled slightly to 8.2%. But this figure is still the highest since the early 1980s, and it is the first time that many young people have experienced inflation.
“Inflation has become something of a cancer,” Christopher S. Rupkey, chief economist at FwdBonds, said in response to the September CPI report. “It’s spilling over into services, where it’s going to be much more persistent, much more stubborn, much more difficult to get those prices down.”
People walking in Chicago on October 14. Credit: Jakub Porzycki/NurPhoto/AP
Employment
The labor market is a bright spot in the US economy, with unemployment at its lowest level in half a century. And wages have risen, on average, more than 5%.
For workers looking for better pay or benefits, now is a good time to negotiate or look for a new job. For hiring managers, the story is different.
There are nearly two jobs available for every job seeker, which is a boon for job seekers but a concern for the Fed, since that drives up inflation when bosses pay more to compete for talent. .
And this week more good news is expected: the US economy continues to create jobs. The October jobs report, due out this Friday morning, is expected to show that 200,000 jobs were added last month, well above the pre-pandemic average.
A “Hiring” sign is displayed in a store window on October 21 in New York City. Credit: Leonardo Munoz/VIEWpress/Corbis News/Getty Images
gasoline prices
Gas prices are notoriously volatile, and they tend to weigh heavily on voters’ minds, yet there is little a politician can do to influence prices at the gas station one way or another.
This has made for a very eventful year, with US gas prices soaring to a record average of $5 a gallon over the summer. Since June, prices have dropped significantly, down to about $3.78. But it may not be enough for Democrats to endear themselves to voters, given the high cost of all other necessities.
Just a week before voters go to the polls, President Joe Biden tried Monday to direct popular outrage at oil companies, whose skyrocketing profits have prompted some on the left to call for an extraordinary tax. .
“The current record profits are not because they are doing something new or innovative. Profits are a windfall of war,” Biden said. “It’s enough”.
A man fills up his car at a gas station in Carson, California, on September 22. Credit: Etienne Laurent/EPA-EFE/Shutterstock
food prices
Food prices are hitting Americans hard, rising 11.2% in the year to September. This is an even more pronounced increase than that of general inflation. Restaurant prices are up 8.5% and grocery store prices are up 13%.
But some supermarket staples have risen even more in the past year: Eggs are up 30.5%; butter, 26.2%; and flour, 24.2%, according to data from the Bureau of Labor Statistics. A handful of food items, such as beef and tomatoes, saw declines from a year earlier.
Several factors have contributed to these higher costs, including the war in Ukraine, drought and other extreme weather conditions, and a deadly bird flu that hit poultry supplies.
But all this is of little comfort to Americans who have had to change the way they eat as well as switch to store brands and cut back to stay on budget. And there may not be much relief in time for the holidays. A recent report from market research firm IRI estimates that a typical Thanksgiving meal will cost 13.5% more this year compared to last.
A customer shops at a Washington supermarket on Oct. 28. Credit: Ting Shen/Xinhua/Getty Images
Mortgage interest rates
Home ownership is at the least affordable level since the mid-1980s.
Mortgage interest rates for a 30-year fixed-rate loan reached 7% earlier this year, and home prices remain just below their recent all-time highs, driving many would-be buyers out of the market. . Rents are cooling off from their peak but are still rising by double-digit percentages from a year ago in many cities.
Inventory remains tight as homeowners who locked in ultra-low interest rates over the past two years by buying a home or refinancing are reluctant to give up their low monthly payments by moving. And this threatens to keep home prices out of reach for many Americans.
— Alicia Wallace, Anna Bahney and Danielle Wiener-Bronner contributed reporting.
