The proportion of consumers expecting a recession in the next 12 months has decreased significantly, reaching the lowest point since the question was first posed in July 2022. Although the labor market in the nation has lost some momentum, the U.S. economy has continued to expand. Federal Reserve rate cuts are likely to result in lower loan rates for both consumers and businesses.
According to the latest figures, inflation has decreased to 2.4%, close to the 2% target set by the Fed, after reaching a peak of 9.1% in June 2022. The economy has shown surprising durability amid the measures taken by the Federal Reserve to control inflation.
Regarding employment, employers have been adding an average of 200,000 jobs per month this year, a solid figure but below previous records, such as the 604,000 jobs added in 2021. The Fed is expected to announce a new rate cut at its next meeting, with more cuts anticipated over the next year.
Despite recession expectations, the economy has continued to grow, with consumers maintaining their spending and employers hiring. A recent report indicated that the consumer confidence index recorded a significant increase, pointing to greater spending by American households.
In a separate report, it was revealed that the U.S. economy grew at an annual rate of 2.8% from July to September, with the momentum primarily coming from consumers. Although growth slowed slightly compared to the previous quarter, prices remain significantly above pre-pandemic levels, raising concerns among some citizens and posing challenges in the political arena. In the Fed's last meeting, the decision was made to cut interest rates by half a percentage point, representing the largest cut in more than four years.
