A Severe Economic Downturn Is Inevitable in 2023
An end to stimulus payments combined with still rampant inflation indicates that there will be a severe economic downturn in 2023.
The Covid-19 pandemic rocked the world in a bad way and is still causing havoc in many ways. An economic downturn is inevitable as the world is still wading through the waters of the pandemic-induced waves. Between rising inflation and hardly any pay increase, record high-interest rates and so many other contributing factors, Americans should brace themselves for the impact ahead.
At one point, recovery looked good and it seemed as though things were turning away from an economic turndown. The United States government distributed nearly $5 trillion in stimulus money to help its citizens make ends meet and get through one of the toughest parts of the pandemic. Additionally, as a result of the pandemic, lending programs were created to further help Americans and interest rates were at record lows.
The economy was moving in a forward direction again, the world started to open up again and it seemed as though the economy has recovered. Soon after things started to settle and regain a slight sense of normalcy, inflation rates started to soar and things took a turn for the worst. The economy began to once again suffer, thus leaving people to wonder, exactly how bad an economic turndown could look in the very near future.
American households are still struggling to make ends meet as rent and mortgage payments have been significantly and steadily increasing. Additionally, inflation has hit gas, and grocery stores and affected so many everyday and necessary items, leaving a cloud of fear for the looming economic turndown. As people are currently struggling to make it day to day with the current economic state, it is next to impossible to prepare for what is ahead.
Employers are also bracing for the impact of an economic turndown and slowing down on hiring new employees. The labor market peaked at one point, which was good for the economy and also good for everyday American citizens as they were bringing in a substantial income that countered inflation rates. With an inevitable economic hit, employers have stopped increasing pay at a significant rate as they were previously to prepare their companies to survive the upcoming economic downturn.
Most Americans no longer have a cushion of savings to hold things over as the economy takes a turn for the worst. Despite the high inflation cost of things, American spending has increased and some people are using their savings to just get by, removing the safety net of cash savings. As the economic turndown Americans are facing will be here sooner, rather than later, they seem to be in the worst position possible.
The economy has not met the projections that were set for the current year, making an economic turndown for next year to be an almost sure thing. Economic experts are projecting even higher interest rates in all sectors and an even more aggressive inflation increase in the upcoming year. This is sure to be a tough pill to swallow and is not something anyone will be able to avoid.
