HUNTSVILLE, Ala. (WAFF) – National and local financial experts are predicting the U.S. economy will hold out for another year after the cost of living and inflation skyrocketed in 2022.
“We really don’t have growth,” said local finance expert Brad Williams. “Maybe we don’t go into recession, which is negative GDP, or we might just stay flat. There will be an increase in unemployment, several things will happen. But if the growth stays the same, then one speaks of ‘slowcession’.”
“Slowcession,” a pun on slow and recession, was recently coined by Moody’s Analytics. Moody’s January 2023 analysis expects the US economy to avoid a downturn, but overall spending will continue to fall. Williams believes rising interest rates are to blame.
“They’ve been artificially held down for so long, and now they’re coming back,” he said.
The Federal Reserve hiked interest rates last fall to fight inflation, but some pundits say it’s a good concern.
Financial expert Don Daniel of PILL Method agrees.
“When there is too much money in the economy, it has a snowball effect. People borrow money, they expand their businesses, they hire more people, then you have to increase your salaries. The Fed comes in and says listen, this is going to cause inflation. Any time you overheat the economy, you’re going to get inflation. So the Fed will raise interest rates to try and slow things down,” he said.
Ultimately, Williams said, despite the unknown, the status of the economy will depend on consumers.
“Consumers drive our economy, so they need to be watched. Right now, consumer sentiment is a little fuzzy because they don’t know what’s coming,” he said.
Copyright 2023 WE`ON. All rights reserved.
Comments are closed.