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Friday, August 12, 2022

Sinking economy as Joe Biden is heavily focusing on Ukraine

After two years of the coronavirus pandemic, a recession and a rapid recovery, Americans are worried that the economy may swiftly decline once again. In a survey conducted by Momentive, some 81% of adults said they think the U.S. economy is likely to experience a recession in 2022. The online survey of nearly 4,000 adults was conducted from March 23 to 24. (Reinke, 2022) Certain groups are anticipating a potential economic downturn more than others, the survey found. That includes Republicans, who are more likely to think there will be a recession than Democrats, as well as those who see themselves as financially worse off this year than they were last year.

The Consumer Price Index (CPI) rose by 7.9% in February, marking the fastest pace of annual inflation in 40 years amid a push higher in rent, food and used car prices. According to the American Enterprise Institute, The very strong labor market numbers do not bode well for President Biden’s prospects in this November’s mid-term elections due to the  Russia’s Ukrainian conflict and China’s Covid-induced lockdown of a number of major cities threaten to send US inflation meaningfully higher in the months immediately ahead. (Lachman, 2022) In addition, inflation is already running substantially above its two percent inflation target, the last thing that the Fed needs is an excessively tight labor market.

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