Unemployment across the Atlantic has been at its lowest level for fifty years. But in a context of high interest rate, the concern of an economic slowdown continues
by Arnaud Leparmentier (New York, correspondent)
Sweet or recession landing? This debate obsessed the United States while the year 2022 ended on an extremely positive assessment. Growth reached an annual rate of 2.9 % in the fourth quarter, according to figures published Thursday, January 26 by the economic analysis office. In 2022, it was 2.1 %, the slight contraction of the first half of which was overcome. The country returns to a natural growth rate, after the 2.8 % recession due to COVID-19 in 2020 and the 5.7 % rebound (revised at 5.9 %) of 2021. This growth was drawn almost exclusively by consumption in services.
On the job side, everything is fine too, with an unemployment rate fallen in December at 3.5 %, its lowest level for half a century. Finally, on the inflation front, the subject seems to be overcome. Admittedly, in December, nominal inflation was still 6.5 % over a year. But from one month to the next, prices fell 0.1 % in December while the price increase over the last three months of 2022 has dropped to 1.8 %.
The Nobel Prize in economics Paul Krugman is surprised to note that many think “that inflation is still unleashed. The public has not become aware of the great deceleration of the second semester 2022.” He believes that ” Too many press items focus on inflation in annual shift and miss the big turning point “while today’s figures” still reflect the rent increases a year ago “. Economists are already on the next blow, such as Olivier Blanchard, ex-chief economist of the IMF, which again provides for the return of “secular stagnation”, made of low rates, insufficient investments and low growth.
serious cooling in December 2>
At the end, the concern relates to the possible economic slowdown, while the federal reserve increased its zero rates to 4.25 % in 2022 and should, estimate the markets, increase them again by 0.25 Point at its next meeting of the 1 er February. But is it not time to reverse the steam, while 60 % of the economists interviewed by the Wall Street Journal predict a recession and that the monetary policy of the Fed takes long months to disseminate in the economy.
December first showed serious cooling of consumer appetite, who reduced their spending by 1.1 %, after a first drop of 1 % in November. Then, the real estate crisis is felt, with a 10 % drop in 2022 of residential investment. Finally, companies are wait -and -see, with a deceleration of investment, which only believed 3.7 % in the last quarter against 10 % in the first half. IT investment is even in decline.
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