American Economy Shrank In The First Two Quarters And Will Likely Stagnate In The Third | Eastern North Carolina Now

    Publisher's Note: This post appears here courtesy of the The Daily Wire. The author of this post is Ben Zeisloft.

    The American economy is expected to grow at a paltry 0.3% annualized rate in the third quarter of 2022, according to data from the Federal Reserve Bank of Atlanta.

    The regional bank's GDPNow tracker, which calculates a running estimate of real output growth, correctly predicted that the economy would contract in both the first and second quarters of this year. Indeed, data from the Bureau of Economic Analysis later confirmed that the United States met the rule-of-thumb definition of a recession - two consecutive quarters of negative growth - as the economy shrank at a 1.6% annualized rate in the first quarter and a 0.6% pace in the second quarter.

    While landmark reports regarding employment, inflation, private inventories, manufacturing output, and the housing market have been published over the past two months, analysts in Atlanta have repeatedly downgraded their growth forecast for the third quarter.

    Price levels increased 8.3% between August 2021 and August 2022, according to a report from the Bureau of Labor Statistics. The reading marks a decline from the 8.5% year-over-year rate seen in July 2022 and the 9.1% year-over-year rate seen in June 2022 as gasoline prices gradually decrease. However, month-over-month prices for food, shelter, and medical services ticked upward, while core inflation - a metric that excludes food and energy prices, which tend to be more volatile - continued to rise.

    Income has nevertheless failed to keep pace with rising costs. Although nominal wages have increased between August 2021 and August 2022, real average hourly earnings - which consider the impact of inflation - decreased 2.8% over the same period, according to another report from the Bureau of Labor Statistics. A decrease in the average workweek by 0.6% implied a 3.4% overall drop in real average weekly earnings.

    Meanwhile, Federal Reserve Chair Jerome Powell recently indicated his willingness to "bring some pain" while combating inflation. Interest rate hikes from the central bank dampen prices by increasing the cost of borrowing money for businesses and consumers. "Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy," Powell remarked at a speech in Jackson Hole, Wyoming. "Without price stability, the economy does not work for anyone."

    Rising interest rates have led to mortgage rates surpassing 6%, according to data from government-backed mortgage company Freddie Mac, even as residential real estate prices soar. Home prices are expected to increase another 4% in 2023 - a relative slowdown from 17.8% in 2021 and 12.8% in 2022.

    "The Federal Reserve's action to help manage inflation has created significant volatility in mortgage rates and, by extension, the housing market," Freddie Mac Chief Economist Sam Khater explained in a press release two months ago. "Although house price appreciation will grow at a more moderate rate, home prices remain high relative to homebuyer incomes. Taken together, these factors are exacerbating affordability challenges and causing a slowdown in the housing market."

    A bright spot in an otherwise bleak economic landscape, however, has been the labor market, which is maintaining unemployment rates well below historic norms. Yet joblessness rose last month to 3.7% even as more Americans returned to work, according to a release from the Bureau of Labor Statistics.


poll#162

In what may be the most divisive period in modern American History, even more divisive than the turbulent sixties due to today's lack of patriotism, consider what are the major catalysts causing so much of this calamity of conflict, and vote: What most instigates the division of America, on this day September 20, 2022?

  Racism within our society

  Sex realignment to the detriment of our society.

  Biden /Harris Wide Open Southern Border Policy for the Demographic Upheaval of OUR Constitutional Republic

  Rampant Crime in Democratic controlled cities, and the possible contagion elsewhere

  Covid Pandemic, and its mishandling at the political, and bureaucratic levels.

  The unresolved questions /allegation regarding the flawed 2020 General Election

  January 6th Riot or "Armed Insurrection", depending upon patriotic perspective

  Joe Biden as Divisive Leader; Ineffective and Corrupt Executive

  Failed Education Industry, from an overall perspective, regarding all levels of education.

  Propagandistic Media in complete conflict with the First Amendment's guarantee of Freedom of Speech, and the awesome responsibility of a Free Press..

  "Orangeman Bad!"

  Bureaucracy rushing to a behemoth size, its unjustified expense, and far too often overreach.

  The Weaponized Deep State for political purposes

  A secular ambivalence to all that is real.

  Record number of overdose deaths from opioids and now Fentanyl

  Biden Administration's disastrous Foreign Policy

  Bidenflation /supply chain failure inevitably evolving into stagflation and recession.

  "Ultra MAGA Extremists" freely speaking louder AND LOUDER!

927 total vote(s)     What's your Opinion?

poll#154

Inarguably, the policies of the Democrats in congress and Joe Biden as the Executive is plunging the United States into a recession, if we are not already there; a recession that was completely avoidable. Will abrupt changes in policies occur in time?

  Yes, the Democrats have a bold plan, yet to be revealed, to save us.

  No, there will have to be a complete undoing of the damage done by these Democrats.

  I can't do simple math, so how am I to understand the concept of basic economics.

1,216 total vote(s)     What's your Opinion?