US Economy Careens Between Glee and Gloom With Each Data Release
Reports on jobs, inflation, and consumer demand are sending conflicting signals, making it harder to see if a recession is coming.
The economy is putting out very mixed vibes. One day there’s an indicator that points toward US recession. The next day, talk of the expansion’s demise is dismissed as exaggerated after another stellar jobs report. “It’s really odd to think of an economy where you add 2.5 million workers and output goes down,” said Federal Reserve Governor Christopher Waller on a July 7 webcast. “I don’t know what kind of world does that.”
Former White House economist Jason Furman admits that he, too, is baffled by the contradictory signals. “There’s so much uncertainty and confusion,” says the Harvard professor. Perhaps it shouldn’t come as a surprise that even the experts can’t get a clear read. After all, we’re still grappling with a once-in-a-century pandemic and its economic aftershocks. Add to that the first major war in Europe since 1945, a 40-year-high inflation rate, and the biggest Federal Reserve interest rate increase since 1994, and it’s no wonder the path ahead is uncertain.