Opinion: We may see sluggish financial progress for the remainder of the last decade

Opinion: We could see slow economic growth for the rest of the decade

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Currently, spending on consumer services (think hotels, passenger transportation and hair salons, for example) is growing rapidly and keeping the economy above water. That is not surprising, because consumer services, like travel and dining out at restaurants, are still recovering from the complete collapse during the early part of the pandemic. And because such services are more labor intensive, jobs continue to grow rapidly.
But this strong growth can’t persist forever. As the fear of the pandemic subsides and households return to pre-pandemic spending patterns, the pace of recovery in consumer services will slow, and by 2023, job growth in this sector will no longer be unusually high. Since consumer spending on services makes up about 45% of the US economy, the slowdown in this segment could tip the economy into a recession, especially if the rest of the economy continues to contract.

The impact of rising interest rates

In its fight to tame inflation and slow the economy, the…

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