Economists predict US inflation will keep cooling and the economy can avoid a recession
NEW YORK (AP) — Most business economists think the U.S. economy could avoid a recession next year, even if the job market ends up weakening under the weight of high interest rates, according to a survey released Monday.
Only 24% of economists surveyed by the National Association for Business Economics said they see a recession in 2024 as more likely than not. The 38 surveyed economists come from such organizations as Morgan Stanley, the University of Arkansas and Nationwide.
Such predictions imply the belief that the Federal Reserve can pull off the delicate balancing act of slowing the economy just enough through high interest rates to get inflation under control, without snuffing out its growth completely.
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High rates work to slow inflation by making borrowing more expensive and hurting prices for stocks and other investments. The combination typically slows spending and starves inflation of its fuel. So far, the job market has remained remarkably solid despite high interest rates, and the unemployment rate sat at a low 3.9% in October.
Well, fuck.
And of course wages aren’t going to take a leap forward either.
Wages are growing on average, and faster than inflation (5.2% wage growth vs 3.2% inflation year over year for the past year). Takes two seconds to Google.
https://www.statista.com/statistics/1351276/wage-growth-vs-inflation-us/
Somewhat remarkably considering the problems with income inequality in the US, wages are growing the fastest of all among people with lower incomes (though all the wage increases in the world aren't gonna tackle the problem of the power of the 0.1% investor class of wealth hoarders).
https://www.epi.org/publication/swa-wages-2022/
https://www.marketplace.org/2023/03/08/lower-income-earners-wages-have-grown-faster-than-others/
It's pretty expected to given the persistent low unemployment and a high labor demand.
Not saying there's no concerns at all in the entire economy or anything crazy. But you don't have to spread disinformation like wages aren't growing.
Disinformation?
I’ll offer this in return:
https://www.spokesman.com/stories/2023/sep/13/wages-are-finally-rising-faster-than-inflation-wil/
So let’s say wages are increasing faster than inflation. A couple articles I looked at said they just started to last quarter, so great, you might be right, but you’ve only been right for a very short while and the buying power that should go along with increasing wages won’t be felt until next year sometime.
Not disinformation, it's accurate. Your article is accurate too, though lacks context and important details. Let me explain.
Wages outpaced inflation at the beginning of the pandemic, stopped being enough to compensate about May 2021, and started to again in January 2023. Though technically even earlier, because these are all year over year rates so it's talking about the entire year summed up ending in January 2023, so in reality that threshold was crossed sometime in the year ending in January 2023. As the graph above showed.
If you're talking about real wages/hr compensated for inflation fully recovering, it depends on your comparison point in time. I think December 2019, just before the pandemic started, makes the most sense as a comparison point. If that's your starting point, real wages/hr are already higher.
Real wages in 1982-1984 dollars, December 2019: $10.96/hr https://www.bls.gov/news.release/archives/realer_01142020.pdf
The same for October 2023: $11.05/hr https://www.bls.gov/news.release/pdf/realer.pdf
Your article doesn't state what it uses as the start point date. I'm guessing to get at that conclusion they must have picked a date already somewhat into the pandemic. I think this is misleading because there was a time at the start of pandemic inflation plummeted as people stopped spending money on many things, while wages continued to increase. If you consider the pandemic as a whole, wages have compensated for inflation. Purchasing power right now is greater than in December 2019. If you cherry pick somewhere in the middle of the pandemic, grabbing the point in time that inflation really started to tick up with the supply chain crisis but excluding the earlier wage increases that occurred during the pandemic, like let's say April 2021 (well over a year into the pandemic), than we would still be below that time point.
April 2021: $11.31/hr https://www.bls.gov/news.release/archives/realer_05122021.pdf
I'm guessing that's the time point your article must have picked, because at the current rate of wage increases over inflation we'll equal that again ~February. But again, misleading year over year rates, so if we hit that on the official number reported in February it means in reality we crossed that point sometime during the previous year ending in February.
And another disclaimer, these wage gains are not even across the whole economy. As your article pointed out, hourly workers and low wage workers saw more of the increases. Some sectors like healthcare and social services saw less of them. So none of this is to imply anything about any particular individual, these are all very broad averages. And of course feel free to disagree with me on what comparison time points make the most sense to you. But I think the most important things in terms of inflation are that month to month inflation is currently pretty flat and back to normal (0.1% price increase in November 2023 from October 2023), and wage increases are continuing to outpace it, so purchasing power will continue to improve over time if these trends continue.
Just fyi, when the poster accused you of disinformation, it was a warning that they were about to push some disinformation.