Could the U.S. still see a recession? A handy primer about the confusing economy

Despite previous cautions of a recession, the U.S economy is demonstrating unexpected resilience and experts see signs of improvement.

Economic recovery: Inflation loomed for two years, but has softened, with annual inflation in June 3%, marking an improvement from the previous year when it was over 9%.
* The unemployment rate is a close 50-year low of 3.6%
* Wages are climbing faster than prices, indicating that workers can afford to buy more.

Experts’ opinions: Forecasters are more optimistic, with 71% in a July survey stating it is unlikely the U.S. will experience a recession in the coming year.
* On a call with investors, Wells Fargo CEO Charles Scharf said: “The U.S. economy continues to perform better than many expected.”

Challenges persist: Despite positive trends, recession fears haven’t disappeared entirely.
* Inflation remains higher than the Federal Reserve would prefer, meaning an expected rise in interest rates looms.
* Predicted ripple effects of rate hikes may be yet to manifest in the economy.
* Some areas, such as manufacturing, are already experiencing a slowdown.

Factors to monitor: Economists and business leaders will continue to closely watch key economic indicators, particularly inflation and the labor market.
* They will also track corporate profitability and debt management, along with the state of commercial real estate.
* Factors like dwindling pandemic savings for many and recommencing student loan payments could impact spending habits and the economy broadly.

View original article on NPR

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