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Conor Sen

Consumers Are Losers in a Booming Industrial Economy

Manufacturing and construction are still going strong, and while that lowers the chances for a recession, it means higher prices will continue for most basic goods.

Consumers aren’t going to catch a break.

Consumers aren’t going to catch a break.

Photographer: Luke Sharrett/Bloomberg

Reasons to worry about a recession are piling up: the Federal Reserve's inflation fight, a slowing housing market, warnings from retailers and venture capitalists and a smattering of layoff announcements. But one part of the labor market is sending a decidedly different signal. Goods-producing employment, which includes industries like manufacturing, construction and oil and gas extraction — is accelerating rather than slowing as it has in previous recessions.

There are a couple of ways this could play out. If the industrial part of the economy powers ahead while other segments pull back, it could simply represent a shift in activity as the Fed brings inflation under control. The second possibility is that the industrial strength forces the Fed to keep raising interest rates to the point that the economy veers into a recession, mild or otherwise.