recession in progress
Despite clear signs of weakness looming in 2023, some economists are cautiously optimistic that the economy will avoid a full-blown recession and instead suffer a creeping slowdown, with sectors declining in turns, and not all at once.
They argue that monetary policy now acts with less delay than before, due to technological advances and the transparency of the US central bank, which, according to them, makes financial markets and the real economy act in anticipation of rate hikes.
Residential investment suffered its seventh consecutive quarterly decline, the longest streak since the collapse of the housing bubble triggered the Great Recession, but there are signs that the housing market may be stabilizing.
Mortgage rates have been trending lower as the Fed slows the rate of rate hikes.
A separate report from the Labor Department showed Thursday that initial claims for state jobless benefits fell by 6,000, to a seasonally adjusted 186,000, in the week ending Jan. 21.
The number of people receiving benefits after an initial week of aid, a rough indicator of hiring, increased by 20,000 to 1.675 million in the week ending January 14.
Companies outside the technology industry, as well as interest rate sensitive sectors such as real estate and finance, are hoarding workers after struggling to find labor during the pandemic.
