Rising recession expectations earlier this year warned of future business slowdowns and significant job cuts, until a government report last month showed unemployment was at its lowest level.
A few weeks later, in mid-February, new retail sales data shattered economists’ expectations and pointed to robust consumer spending, the mainstream of the US economy.
The blockbuster economic performance bolstered hopes that the economy would easily avoid a recession.
The economy remains “strong and robust”. Goldman Sachs cut the odds of a recession in the next 12 months to 26%.
The US economy is growing in a few key metrics, but most economists say the country is still headed toward a likely recession next year.
Meanwhile, Covid has forced billions around the world to shut down, shifting demand for concert tickets and restaurant meals to shortages of precision products. The war between Russia and Ukraine widened the deficit and pushed prices even higher.
The Federal Reserve has imposed aggressive rate hikes since last year, with the goal of reducing inflation by cooling the economy and suppressing demand. However, this approach risks plunging the US into a recession and leaving millions of people unemployed.
The Fed’s rate hikes have helped bring inflation down significantly from its summer high. However, politics has not stopped the economy as a whole, as evidenced by the recent solid economic statistics.
Expectations of gradual reduction of food in the midst of economic recovery
The combination of lower inflation and sustained economic gains has raised expectations among some of a soft assumption that the Fed will slow the economy and reduce inflation while avoiding a US recession. But the Fed’s tapering is generally delayed months after a given rate hike.
Some parts of the economy have shown signs of slowing down. Home sales declined for a twelfth month in January, hitting the lowest level since November 2010.
The president and CEO of the Las Vegas Global Economic Alliance said the city was previously strong as leisure and travel rebounded from the pandemic hiatus.
The median rate for a Las Vegas hotel room was $166, well above the pre-pandemic rate of $127. Las Vegas Airport handled 52.6 million passengers last year, a jump from 51.5 million in 2019.
However, rising costs have dwarfed the company’s profits, as major food suppliers pay twice as much for some products as they did before the pandemic. Perhaps the recession is forcing corporate clients to cut back on catering, which accounts for 73% of company revenue.
