Gas And Food Prices Continue To Climb; Jobs Market Still Tight Despite Layoffs
February 17, 2023—The U.S. economy continues to run more hot than cold, despite previous forecasts that a recession would loom early in 2023.
The IMF had projected a steep decline for the global economy at the beginning of the year. Then, the World Bank said the world was “perilously close” to falling into a recession. But despite the doom and gloom, the U.S. economy keeps growing.
Prices are climbing; the job market remains tight even as certain economic sectors deliver layoffs; and U.S. equity markets are rising.
Inflation: Prices Still Rising
Inflation in the United States remains high, even as the overall CPI figure comes down from its peaks of 8.6 percent and 9.1 percent of an annualized rate to 6.4 percent. Food and gas prices soared while the cost of used vehicles came down. Producer prices, meanwhile, spiked back up in January after falling in December, the Bureau of Labor Statistics reported on Thursday.
More Volatile Than Stable
In terms of stability, however, the economy is fragile. Consumer debt is rising quickly and sharply. U.S. household debt rose by $394 billion at the end of last year, Reuters reported citing Federal Reserve data. The spike in mortgage and credit card debt is the largest in 20 years, and it adds up to $16.9 trillion. That’s up from $11.35 trillion at the end of 2012—10 years ago.
The high rates of debt and rising interest rates are a bad combination. The data suggest JP Morgan’s Jamie Dimon may have been on target last June when he predicted banks would bear the cost of delinquencies. It may be too soon to tell if consumer debt poses a risk. Delinquency rates for credit cards, auto loans and mortgages increased slightly in the latest figures on debt by the New York Federal Reserve. But compared to the early warning signs of trouble in 2008, mortgage payoffs today are stable.
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