This year has brought inflation, bank failures, and layoffs. What does this mean for the economy in 2023? Let’s break it down.
As we reach the midpoint of 2023, the economic landscape feels perplexing. Although the unemployment rate is down and the job market looks solid, reports of mass layoffs seem to surface weekly. Inflation has eased somewhat, but it still exceeds the Fed's target of 2%. The specter of a recession looms, a topic we've been discussing since last June. While it's a concern, many economists recently suggested that a recession may not happen this year. We've also witnessed the collapse of three significant banks with assets totaling $532 billion, alongside a debt crisis that almost destabilized the U.S. economy — thankfully averted at the last moment. It’s a lot to digest, and if you’re feeling uncertain about these economic developments and their impact on your finances, you're not alone.
Journalist Catherine Rampell offers insights into what this economic news signifies for individuals and what we might expect down the line. Tune in to hear her thoughts on pressing economic questions and their implications for our financial choices.
Rampell notes that many are experiencing tighter budgets, which is understandable. Early in the pandemic, government aid like expanded child tax credits and multiple rounds of stimulus checks improved living standards, leading to increased consumer spending on home goods instead of dining out or traveling. “With rising prices and the end of various support measures, many have depleted their savings and feel financially strained,” she explains.
Recently, the Fed paused interest rate hikes, a potential win for consumers as it may delay further rate increases. “If you’re planning a major purchase that needs financing, now could be a good time,” she advises, but “if it’s not urgent, you might want to hold off.” She elaborates on her reasons for this cautious approach.
LISTEN: The Market, The Economy And A Recession
In our Mailbag segment, we address a listener's query regarding negotiating a settlement and spousal support due to a chronic progressive illness. This week’s money tip explores whether 2023 is a suitable year to purchase a home.
