Despite the Federal Reserve‘s vigorous attempt to reduce inflation, total inflation increased by 0.5% in January, rising to 6.4% higher than a year earlier. Even if the rate of inflation has slowed, the Federal Reserve has stated that it is still too early to declare that the battle against inflation is won, according to Cathy DeWitt Dunn, president and chief executive officer of DeWitt&Dunn. Fed Chairman Jerome Powell announced another rate hike on 1 February to tackle persistent inflation in the US economy and get closer to the 2% target rate.
DeWitt Dunn advocates that there are a number of signs that investors use when determining the state of the US economy. “While the economy continued to develop strongly through the end of 2022, GDP only increased by 1% total, a sharp decline from the 5.7% rise seen a year earlier. The most recent statistics also showed a significant drop in home market activity as rising building costs and interest rate rises placed pressure on buyers and sellers.”
DeWitt Dunn Advises Caution About US Economy
According to economists, the probability of recession in the US Economy in 2023 is 61%, but the Federal Reserve is still optimistic about a “soft landing”. Consumer and corporate spending should continue to decline as federal interest rates rise, increasing the likelihood of a recession. Nonetheless, it’s crucial to be ready for tough economic times if a recession occurs in 2023. As DeWitt Dunn suggests, “The economy is continually growing and shrinking, which necessarily results in sporadic recessions.”
“With 3.4% right now, the unemployment rate is at its lowest point since 1969. Nearly every jobless individual may find a job, but recent large-scale layoffs, like those occurring in the IT sector, may cause the unemployment rate to rise. Another sign of a recession should be a slowdown in consumer spending caused by layoffs, tighter budgets, and increased prices. The economy should adjust when consumers cut back on their spending,” DeWitt Dunn exclaims. She also advises controlling what you can by making sure your funds are prepared for whatever may arise in any financial situation.
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