This year, the economy in the United States shows high employment rates. However, there is a significant portion of the population is dissatisfied with their financial situation. With this BNN breaking, there is no doubt people are already agitated by the situation.
The country is experiencing the highest inflation rate in four decades, which has led many consumers to feel negative about their finances. According to a recent survey published by Gallup, 50% of respondents reported that their financial situation was worse than it was a year ago, marking the highest percentage since 2009.
What do the recent data show?
Although some data indicate that wages for lower-income workers are increasing, a significant number of individuals continue to struggle financially. 61% of people with annual earnings of $40,000 or less reported that their financial situation had worsened over the past year, according to Gallup. This is the highest percentage among all income groups. However, even among higher earners, those making at least $100,000 annually, 43% reported feeling financially strained.
Despite the negative outlook, economists point to various data indicating that the U.S. consumer is still in a strong financial position.
For instance, the unemployment rate, currently at 3.4%, is lower than pre-pandemic levels.
Additionally, as inflation begins to slow down, the total disposable income in the economy is gradually increasing, having experienced seven consecutive months of growth since June. Similarly, aggregate savings in the economy are also on an upward trajectory.
The positive state of the U.S. economy has led to sustained demand for goods and services, resulting in a rise in the number of jobs. The January jobs report indicated the addition of 517,000 jobs, the most since July. Although the gross domestic product (GDP) has possibly reached its peak during the post-pandemic period, it continues to show a positive trend, with 2.9% growth in the last quarter.
What do experts have to say?
The senior U.S. economist of a reputable financial services company believes that consumers appear to be doing well based on most objective measures. According to him, people don’t have control over their spending. They’re spending as if they’re financially stable, so the results of the Gallup Poll shouldn’t be given much weight.
Jay Powell, the Federal Reserve Chairman, believes the economy’s growth is still strong. The most recent economic data have exceeded expectations, indicating that the eventual interest rate level will probably be higher than previously estimated. He further stated the team implemented significant measures, and it may take some time to see the full impact of these actions.
As the key federal funds rate, which large banks use for overnight borrowing from the Federal Reserve, approaches 6%. Many economists predict that interest rates will rise significantly, leading to a recession by the end of the year.
House stated that a recession will arise from the tighter monetary policy environment when companies begin to examine their investments and hiring practices.
Economists anticipate that the Bureau of Labor Statistics will unveil its February jobs report to show around 225,000 new jobs added, approximately half of January’s report. Furthermore, the latest inflation data for the U.S. economy seems to be BNN breaking news. The bureau will release it. If either of these figures surpasses expectations, it will confirm that the economy is still growing, and it could be challenging for the central bank’s efforts to combat inflation.