Experts from CNN say that we're now in the "yes, but" economy — which means that, yes, recession worries are present, but the economy is strong despite these worries.
Whether or not a recession is imminent is at the forefront of the economic landscape in the United States. The headlines are inconsistent at best and fear-mongering at worst. But when it comes to a potential recession, the truth is complicated. The November jobs report included 263,000 new jobs added, and the jobless rate held strong at 3.7%, nearly a 50-year low. Also, the Personal Consumer Expenditure (PCE) Price Index is slowing, showing that the Federal Reserve's attempts at combating inflation are working. And finally, gross domestic product (GDP) grew 2.9% last quarter, which starkly contrasts with the shrinking GDP at the beginning of the year.
The "yes, but" economy is due to a sense of "second-hand pessimism," says Curtis Dubay, Chief Economist for the U.S. Chamber of Commerce. According to Adobe Analytics, inflation is still a problem, but consumer spending has not been impacted. The housing market is cooling, but the sector is going through a readjustment period after the housing boom of 2020, when city-dwellers fled to the suburbs for space during the pandemic. Things are returning to a new form of normal, whether or not many experts and consumers believe it.
COVID-19 didn't just shake up the economy, says CNN Chief Business Correspondent Christine Romans, it shattered what we thought we knew about the economy. Millions of jobs were lost, schools were closed, and businesses were lost, and the American people won’t quickly forget that the economy recently endured this traumatic shake-up. In many ways, we expect it to happen again, and we don't trust that the other shoe won't drop.
It can be hard to see how strong the economy is in light of the recent turmoil, says Romans. But ultimately, improvement is on the horizon.