Three indications that the United States economy is headed for a crisis

Worries about whether America could fall into recession dominate dialogue among investors and pose a risk to the Biden administration ahead of midterm elections this fall.

Meanwhile, United States economy is humming – despite signs that it is sliding into a lower gear. This shows the government’s optimism that hope will always be there even though it may be difficult to achieve.

It causes new challenges for companies & workers. But it could help the Federal Reserve in the medium term, as it tries to restore pandemic-era support for the economy and control inflation without causing a shock.

Here are 3 indicators that America’s economic engine is cooling off compared to the frenzied period after the coronavirus lockdown was lifted.

1. The job market: United States  jobs report for May announced Friday that 390,000 positions were added last month. That’s a solid number, and higher than expected, but down by 428,000 in April. For most of last year, approximately 450,000 to 650,000 jobs were added each month.

two. Housing market: Borrowing costs soared as a result of the Fed’s decision to start raising interest rates. The 30-year permanent mortgage rate was homogeneous at 5.09% for the week ending June 2, up from 2.99% in the same period last year.

That pushed some potential home buyers out of the market, helping to reduce hot demand. Residential sales in the United States fell for the third straight month in April.

three. The Beige Book: The Fed’s modern survey of economic conditions released this week, known as the “Beige Book,” shows that 12 districts across the country are experiencing growth, but the impact of tougher financial conditions is starting to show.

“Retail contacts saw some weakness as consumers faced higher prices, and residential real estate relations saw weakness as buyers faced higher prices and rising interest rates,” the report said.

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Eight districts reported that “the prospects for future growth in their relations have diminished,” ad interim relations in the 3 districts “specifically expressed concern about the recession.”

However, the data is messy. Economists at Citigroup think the hiring pullback may not be a concrete frequency that the economy may return to a more normal pace, for example. The economic situation has started to be difficult & stressful but difficult does not mean impossible.

“While this slowdown can be a welcome indication to the Fed that demand for workers is easing, in the near term we expect that the slower pace of job growth will more likely reflect the limitations created by the labor shortage,” they said in a statement. research notes were published this week. There were 11.4 million job openings in the United States in April.

Plus, ad interim housing sales have slowed down, and prices continue to rise. The price homogeneity of a residence in April was a record $391,200, up 14.8% from last year, according to a report by the National Association of Realtors.

That means that ultimately it is too soon to say whether the Federal Reserve’s plan to engineer a “soft landing” for the economy to succeed and that investors would be wise to continue using caution. OPEC will pump and more. The 1970s-style power crisis still looms

OPEC has unanimously decided to pump more crude oil over the next 2 months as Russian production begins to fall due to Western sanctions. But that doesn’t mean we rely on other people.

Breakdown, breakdown: The oil-exporting cartel said it would increase supply by 648,000 BPD in July and August, more than 200,000 BPD according to a scheduled supply agreement with other producers, including Russia, known as OPEC+.

The Biden administration welcomed the “crucial decision based on OPEC+,” and highlighted Saudi Arabia’s role as the mob’s biggest producer in reaching a consensus.

But the market reaction to the announcement has been muted. World oil prices rose by more than 1% to around $117 a barrel on Thursday. They fell 5% in anticipation of the previous day’s announcement.

Robert McNally, president of Rapidan Energy Group, said prices rose Thursday because OPEC’s move “is more symbolic than fundamentally significant and we have to think hard about finding ways other than relying on others, particularly in the energy sector.

“I wouldn’t call it a drop in the bucket,” he told CNN Business. “It’s a crucial sign.” However, it is unlikely to replace the broader dynamic that has pushed up energy prices, exacerbating the worst portfolio crisis in decades.

Current and former energy officials told CNN that they feared that Russia’s annexation of Ukraine, which followed years of underinvestment in the power sector, would build a case that would rival the oil crisis of the 1970s and early 1980s.

“We have an oil crisis, a gas crisis, and an electricity crisis at the same time,” Fatih Birol, chairman of the International Energy Agency, told Der Spiegel in an interview published this week. “This energy crisis is much bigger than the oil crisis of the 1970s & 1980s. And will probably last much longer.”

JPMorgan Chase CEO Jamie Dimon, Wall Street’s most prominent executive, struck a chilling tone this week when he warned he was preparing for an economic “storm”. We must be able to doubt this condition but that doesn’t mean we are afraid and don’t do anything, this is like committing suicide twice.

Tesla (TSLA) CEO Elon Musk has a “very bad feeling” about the economy and wants to cut jobs by about 10 percent at electric-riding producers, he told executives Thursday in an email reviewed by Reuters.

The message comes 2 days after Musk informed employees that they must return to Tesla’s work and factory or leave the company. Tesla & its subsidiaries employed approximately 100,000 people by the end of 2021, from regulatory filings. Before Musk’s note, which arrived in an email entitled “distance across all recruits worldwide,”

Tesla has about 5,000 job postings on LinkedIn, based on sales to Tokyo and engineers at the new Berlin gigafactory to deep learning scientists at Palo Alto, from Reuters.

In conclusion: Musk is the most prominent executive in the auto industry who expressed extreme concern about the prospect. Is the “bad feeling” based on the data, or is it due to negative sentiment among consumers, investors, and some economists?

So far, the Tesla looks fine. Despite battling significant supply chain challenges, Tesla posted record profits last quarter, shattering Wall Street’s assumptions. And domestic auto supplies remained stable, suggesting that demand is still solid.

A cheerful heart is a good medicine, it means we must have good comfort to be able to get through the economic storm that is likely to occur when it hits the United States economy. Our successes and failures in facing the crisis will have a big impact on other countries in the world because apart from being tied to the economy they are also tied to their thoughts and psychology.

They make us a leader and role model for developed and successful countries. It is proper for us to go through this storm of crisis using kindness and courage to face the challenges that exist.

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