Recession fears are being blown out of proportion. Worry about inflation instead
CNN
Bad news about the US economy travels fast. But examples of a slowing economy are potentially being blown out proportion.
Bad news about the US economy travels fast, but examples of a slowing economy are potentially being blown out proportion. Consumer spending declined in January for the first time in nearly two years, a real-time forecast of economic growth recently turned negative, the housing market was off to a sluggish start this year and the air is rife with uncertainty because of President Donald Trump’s frenetic back-and-forth on tariffs. The Conference Board’s latest consumer survey even showed that the share of respondents expecting a recession in the coming year jumped in February to a nine-month high. But data for the beginning of the year was skewed by temporary forces, such as unusually harsh weather and wildfires. The underlying fundamentals remain solid: Employers continue to add jobs at a healthy pace, unemployment has stayed low and wages are still outpacing inflation. And it’s true that Americans are feeling uneasy because of Trump’s tariffs, but sentiment is not great at predicting future spending behavior. One cause for concern, though: The Fed still isn’t done bringing inflation to target, and the threat of a global trade war sparked by the Trump administration could jack up consumer prices further.
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