Economics “yes, but”. Yes, we are worried about the recession, but the economy remains strong

New York
CNN Business

Every week brings dizzyingly conflicting news about the economy. The past week has been no different from a series of economic reports showing that, despite talk of a recession, the US economy is showing remarkable resilience.

Yes, the economy is strong. But this comes with a lot of caveats.

Let’s consider:

However, these are just ingredients in a murky soup of controversial yes-but headlines.

Yes, consumers say they are lousy about the economy. But a record 196 million Americans went shopping on Thanksgiving weekend, and those crazy sales figures not only because inflation pushed prices higher, but also because people made more transactions, according to Adobe Analytics.

Curtis Dubey, chief economist at the US Chamber of Commerce, calls it “second-hand pessimism” and says the economy maybe not as bad as you think.

Yes, inflation at almost 40-year highs bites family budgets. But Americans are booking flights and heading to Disney parks in near-record numbers. even with higher park prices.

Yes, economists fear a recession, but the labor market is incredibly tight more than 10 million open vacancies and 1.7 vacancies available to anyone who is looking for her (or wants to change jobs).

“The labor market is incredibly strong again,” said Federal Reserve Chairman Jerome Powell. in a speech on Wednesday. “In a way, it’s too great, because it will increase inflation.”

So what’s next?

The truth is that no one knows what will happen next. Forecasts have been notoriously unreliable in a post-COVID economy. (Remember “short-term” inflation?)

The Fed is trying to contain the highest inflation since the 1980s by raising interest rates six times this year and even raising them by three-quarters of a point not just once, but four times in a row.

This means next year is sure to be a challenge as all these tightenings continue to affect the economy.

But household finances are in better shape to deal with this, with $1.7 trillion in surplus savings as a cushion, although people will likely have to put in more of their savings.

And while the housing market may be cooling, it is not collapsing. After a very strong 2021, the sector is “realigning, recalibrating,” Bess Friedman, CEO of Brown Harris Stevens, said on CNN’s Early Start.

Covid destroyed the economy and it was difficult to restore it. Tens of millions of jobs were lost overnight. Schools are closed, factories are closed, more than a million people have died. More than two years later, we are still trying to assess the strength and durability of the recovery.