Even as the Federal Reserve has sent borrowing costs sharply higher, the economy’s resilience has been on plain display: Consumers keep spending and employers keep hiring. Inflation has reached its lowest level in two years, helping Americans stretch their paychecks.
The government estimated Thursday (July 27) that the economy expanded at a solid 2.4% annual rate in the April-June quarter, an unexpected pickup from the 2% pace in the first quarter. Businesses helped drive the growth, with robust investment in equipment, software and buildings.
The latest snapshot of the economy coincides with rising sentiment that it may achieve an elusive “soft landing,” in which growth slows and inflation falls without igniting a full-blown recession.
Analysts point to two trends that might help stave off an economic contraction.
Some say the economy is experiencing a “rolling recession,” a circumstance in which only some industries shrink while the overall economy manages to stay above water.
Others think the nation might have experienced what they call a “richcession”: Major job cuts, they note, have been concentrated in higher-paying industries like technology and finance, heavy with professional workers who generally have the financial cushions to withstand layoffs. Job cuts in those fields, as a result, are less likely to sink the overall economy.