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The American economy is thriving. Why Do Economists Fear a Recession, Then?
There are few indications that a recession is about to occur. But extreme demand and a lack of supplies are pushing the economy to its breaking point.
Employers are creating tens of thousands of new positions every month and would add much more if they could find qualified candidates. Spending by consumers, business investment, and wage growth are all at their strongest rates in decades.
Economic experts have to be alert to the possibility of a recession.
Forecasters have drastically reduced their predictions for this year's economic growth and increased their odds of an outright recession as a result of rapid inflation, skyrocketing oil prices, and global instability. That worry is shared by investors: Last week, the bond market gave off a warning sign that, while not always, has indicated a slump.
When the economy is, by many metrics, prospering, such projections may seem perplexing. More than 90% of the jobs lost in the first few weeks of the pandemic have been recovered in the United States, and businesses are still hiring rapidly — 431,000 jobs were added in March alone. A half-century low, the prepa.jpg)
Gabby Jones for The New York Times
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ndemic level was just over the current jobless rate of 3.6 percent.
The amazing vigor of the comeback, according to the doomsayers, holds the seeds of its own demise. The fastest rate of inflation in the past 40 years has been brought on by a shortage of goods and services, including housing, vehicles, food at restaurants, and the labor to make them all available. The Federal Reserve's policymakers contend that they can reduce inflation and slow down the economy without increasing unemployment or starting a recession. But many economists doubt that the Fed can create such a "soft landing," particularly at this time of such high levels of uncertainty around the world.
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