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U.S. economy stumbles into final stretch of 2022 facing new pressures
ECONOMY
U.S. economy stumbles into final stretch of 2022 facing new pressures
The stock market had a brutal third quarter, but consumer confidence and the labor market remain solid.
By Rachel Siegel and Rachel Lerman
October 1, 2022 at 6:00 a.m. EDT
It’s normally peak season at Asurion Phone & Tech Repair, but Gean Rodriguez said foot traffic has slowed down in the last couple of weeks. The Chicago repair technician wonders if cooler weather is keeping customers at home, or if people are saving their money for the holidays. ... Without the answers, he’s waiting for business to pick back up to more normal levels, all while the company contends with bungled supply chains and high costs for electronic parts. ... “We barely have anything at the moment,” Rodriguez said. “We’re hopeful for more business. Some people might try to save their money for the holidays, presents, reunions, things like that.”
{snip}
The slowdown at Rodriguez’s shop may offer a snapshot of the nation’s economy as it heads into the final stretch of the year. Policymakers are rushing to cool off demand and get control of inflation, hiking interest rates at the most aggressive pace in decades. Fed officials have slashed their expectations for growth this year, and the risks of a recession, in the United States and around the globe, appear likelier by the week. A number of economists are bracing for a downturn in late 2022 or early 2023.
But fresh data in recent days suggests the economy isn’t sputtering quite yet, and that two of the economy’s main engines are still revving. The labor market remains incredibly tight, based on data released Thursday. On Friday, a new government report showed consumer spending and personal incomes both rose in August, even while inflation remained high. Another survey showed that consumer confidence has recovered since early summer, when gas prices were much higher.
Many households and businesses are caught in the middle of this economy tension, straining to absorb high prices but not yet experiencing the pain some Federal Reserve officials say is coming. ... Economic unease is sinking in. All the major stock indexes closed out the month on a bleak note, and the Dow Jones industrial average was down 5.4 percent for the third quarter, which ended Friday. The housing market is cooling off, with the highest mortgage rates in 15 years discouraging aspiring buyers. Retailers are already starting to discount items for the holidays, hoping to attract increasingly budget-conscious shoppers.
{snip}
By Rachel Siegel
Rachel Siegel is an economics reporter covering the Federal Reserve. She previously covered breaking news for the Post's financial section and local politics for the Post's Metro desk. Before joining the Post in June 2017, Rachel contributed to The Marshall Project and The Dallas Morning News. Twitter https://twitter.com/rachsieg
By Rachel Lerman
Rachel Lerman covers breaking news in technology for The Washington Post. Twitter https://twitter.com/rachelerman
U.S. economy stumbles into final stretch of 2022 facing new pressures
The stock market had a brutal third quarter, but consumer confidence and the labor market remain solid.
By Rachel Siegel and Rachel Lerman
October 1, 2022 at 6:00 a.m. EDT
It’s normally peak season at Asurion Phone & Tech Repair, but Gean Rodriguez said foot traffic has slowed down in the last couple of weeks. The Chicago repair technician wonders if cooler weather is keeping customers at home, or if people are saving their money for the holidays. ... Without the answers, he’s waiting for business to pick back up to more normal levels, all while the company contends with bungled supply chains and high costs for electronic parts. ... “We barely have anything at the moment,” Rodriguez said. “We’re hopeful for more business. Some people might try to save their money for the holidays, presents, reunions, things like that.”
{snip}
The slowdown at Rodriguez’s shop may offer a snapshot of the nation’s economy as it heads into the final stretch of the year. Policymakers are rushing to cool off demand and get control of inflation, hiking interest rates at the most aggressive pace in decades. Fed officials have slashed their expectations for growth this year, and the risks of a recession, in the United States and around the globe, appear likelier by the week. A number of economists are bracing for a downturn in late 2022 or early 2023.
But fresh data in recent days suggests the economy isn’t sputtering quite yet, and that two of the economy’s main engines are still revving. The labor market remains incredibly tight, based on data released Thursday. On Friday, a new government report showed consumer spending and personal incomes both rose in August, even while inflation remained high. Another survey showed that consumer confidence has recovered since early summer, when gas prices were much higher.
Many households and businesses are caught in the middle of this economy tension, straining to absorb high prices but not yet experiencing the pain some Federal Reserve officials say is coming. ... Economic unease is sinking in. All the major stock indexes closed out the month on a bleak note, and the Dow Jones industrial average was down 5.4 percent for the third quarter, which ended Friday. The housing market is cooling off, with the highest mortgage rates in 15 years discouraging aspiring buyers. Retailers are already starting to discount items for the holidays, hoping to attract increasingly budget-conscious shoppers.
{snip}
By Rachel Siegel
Rachel Siegel is an economics reporter covering the Federal Reserve. She previously covered breaking news for the Post's financial section and local politics for the Post's Metro desk. Before joining the Post in June 2017, Rachel contributed to The Marshall Project and The Dallas Morning News. Twitter https://twitter.com/rachsieg
By Rachel Lerman
Rachel Lerman covers breaking news in technology for The Washington Post. Twitter https://twitter.com/rachelerman
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