The US economy is going through a delicate phase and a difficult turning point, like other advanced economies, and all efforts are focused on ensuring its growth, regardless of its level during the current year, in order to avoid entering a recession, the length of which no one can predict, and the level of its crisis. Last year, economic lawmakers were keen to emphasize that the US economy is experiencing a slowdown, not a contraction, and that it is capable of achieving growth in the coming period, against the backdrop of a modest decline in inflation rates, despite the periodic interest rate hikes by the Federal Reserve, such as the Central Bank. Other central banks on the western scene in general. The first concern now is to control inflation in one way or another, taking into account the negative effects of high interest and its reflection on the path of growth.
And because this is the case, the announcement by the US Department of Commerce to reduce the gross domestic product growth for the second time for the fourth quarter of last year to 2.6 percent, was expected. It seems clear that the downgrade could continue this year, reinforcing the belief that the US economy is already on the verge of a deep slowdown, if not deflation. It is true that this cut did not affect the growth of the entire year, but it gives uncomfortable signals to the economic policy makers in the country, who seek to make the current year a year of relief from the effects left by the Corona pandemic, and of course from the massive inflationary wave, as well as mitigating the economic repercussions of the ongoing war. in Ukraine. There are many factors that make the future of the world’s first economy a bit vague, or let’s say it’s not completely clear.
Despite the remarkable improvement in terms of employment in the local arena, recent data showed an increase in the number of applications for unemployment benefits. This confirms that difficulties still exist in the labor market, and that this market will not return to what it was in the past for a period that will not be short, especially with doubts about the expected levels of growth for the current year. The World Bank expected that the US economy would achieve a growth of 1.4 percent by the end of this year. Although the recent low growth adjustments kept its level last year at 2.1 percent, the matter is different in terms of growth for the current year, with a state of uncertainty, as well as monetary tightening policies that seem to continue in the coming period.
There was growth last year, there is no doubt about this, but it is much slower, if compared to the growth rate achieved in 2021, which reached 5.9 percent in the United States. However, even this high growth was normal after the movement of the production wheel almost completely stopped, due to the repercussions of the Corona pandemic that hit the global economy as a whole. The general scene of the US economy is dependent on its movement in the current year, and the approach taken to control inflation through more monetary tightening, in addition to what are the effects in the medium term resulting from the difficulties that some US banks have experienced recently, despite the complete control – now of least- on it. At this time, the labor market remains the most important indicator, especially with some of the changes that have taken place recently, with the layoffs of not a few numbers of employees working in huge technology companies. But in the end, if there is no reasonable growth, the US economy will remain on the brink of recession, or at best, in a slowdown.
