Can U.S. avoid a recession? As inflation eases, optimism rises

Even if unemployment remain low, employers don't have to perpetually pay ever-higher wages to fill jobs. They can try to automate some jobs, for example. That's what many companies in Japan, where unemployment has been low for years, have done.

Unemployment as in fudged numbers including part time and gig workers living at home and on precarious contracts? With stagnant wages.

Good to see AP mentioning this.

The automation wave was a given after the pandemic.

Some positive, progressive trends now taking place in the US economy. Hopefully it can continue, unless Russia and China do something really stupid again.

they cant as desperate need new war somewhere.to survive from suffering of others as they do for decades.

Exactly @JeffLee. I see glimmers of hope elsewhere too. If we get through the rest of the winter / early Spring with the kinds of data that has been coming out and the Fed isn't forced into anymore than some gradual 0.25bp moves, things may seem a little brighter come the Summer.

@Eastman: Nobody WANTS war mate. If we let people like Putin behave like they want right now then it's just like going back to the 1930s and letting Herr Hitler do exactly what we wants and appeasing him constantly until it's too late. I understand you are anti US.. But be realistic.

Congress may also struggle to raise the debt ceiling by this summer, which could cause economic turmoil, or a deep recession if they fail to do so.

hmmm, well, out of control spending has hardly proven good for the economy either…

The has million of hoarders,they will fuel American economy as. hold

In the meantime, the job market — the most important pillar of the economy — remains remarkably sturdy.

These trends are raising expectations that the Fed might manage to engineer an often-elusive “soft landing," whereby the economy slows but doesn't go into reverse and unemployment rate rises slightly but stays low. It would still mean painful times for many people. But it wouldn't inflict the widespread unemployment that typically results from a recession.

The most positive sign, Blinder said, is the ongoing slowdown in inflation. It has dropped from a peak of 9.1% in June to a still-high 7.1% in November. When the government issues the December inflation report Thursday, economists predict it will show another step down, to 6.5%. On a monthly basis, prices are expected to have remained flat from November to December — another encouraging sign.

The inflation slowdown stems from a range of factors, including cheaper gas, the unraveling of supply chain snarls and smaller profit margins among many retailers.

The national average price of a gallon of gas was $3.27 on Wednesday, far below the $5 peak in mid-June. Average used car prices, which skyrocketed 37% in 2021, have dropped for five straight months. They're now 3% cheaper than they were a year ago. Clothing prices have declined in two of the past three months. Furniture prices have dropped for three straight months.

The US market has been amazingly resilient, that the US Federal Bank actually wishes something ya don't usually hear ever:

They want a modest job growth, but not a huge job growth that would overheat the inflation rate

This past holiday season, consumers continued to spend, more than last holiday season. There's still more job openings than people looking for jobs. So inflation is still an issue

It is a weird situation

The economy is always going up and down. It's kind of like being on a rickety roller coaster. Just put your seat belt on and hope for the best.

IMO, the best thing to do is to tax the hell out of the rich fat cats while giving huge tax cuts to the middle and lower classes. That'll get the blood pumping and flowing through the body and really bring it back to life.