Where’s the Recession? The Four Economic Factors Keeping It Off | WSJ - YouTube

Fact   #unemployment #useconomy #ushousingmarket  

#USEconomy #Unemployment #USHousingMarket

Economic recession can be triggered by one of these 3 factors which act as a triangle-shaped cycle. All these factors were strong back in 2022 when rate hike started by Fed, and they still are now as of Q3 2023, here are the reasons

1. People spend less money. Spending remains strong because of high saving rate during pandemic and we still have lingering post-pandemic effect that keeps spending strong.
2. Businesses make less profit. Businesses remain strong as their profit margin remain high, large corporations either locked in low interest rate or had low level of debt.
3. Businesses lay off workers. Unemployment remains low because labor force participation still is lower than pre-pandemic levels due to shortage of labor and number of vacancies remain higher than pre-pandemic levels. This keeps wage growing. July 2023 was the first time in last 20 years wage growth rate exceeded rate of inflation.

Housing market: Usually in the history of recessions, when Fed raised interest rates, one of the 3 factors were triggered by downturn of housing market. But so far this year, housing market grew due to partly "mortgage winter"