Since July 2023, "recession" has become a hot topic, and more and more data and signals indicate that the possibility of recession is increasing. Today we will talk about the reasons behind these phenomena and the difficulties faced by young Americans.

Simply put, a recession is an overall decline in economic activity, and this decline must last for a period of time to be considered a recession. Officials usually use indicators such as GDP, residents' income, unemployment rate, and industrial production to measure it. If these indicators continue to deteriorate, a recession becomes a reality. Although the latest US GDP grew by 2.8% in the second quarter, the economy looks good on the surface, but many details make people feel worried. For example, the unemployment rate has risen, the manufacturing industry has performed weakly, and consumer spending is not as good as before. Young people have difficulty finding jobs and wages have stagnated. These are all problems.

Although the unemployment rate remains at around 4%, many young people find it particularly difficult to find a job. Many unemployed people are not counted in official data. They either give up looking for a job or turn to temporary positions such as part-time jobs. The actual unemployment situation is much worse than the data looks. Since 2022, the growth rate of real income has slowed down significantly, and inflation has increased the pressure of life. Despite the reduction in working hours, wages have almost stagnated, and many young people feel that their income is not enough to cover their expenses. Credit card debt has exceeded $1 trillion, with an average interest rate of 24%. In order to maintain daily expenses, young people have to rely on credit cards, but high interest rates have trapped them in debt and made it difficult to extricate themselves.

The United States is currently in the downward phase of the economic cycle. Since 2019, the inversion of Treasury yields has sounded the alarm. The current recession is actually the gradual exposure of long-accumulated problems. The US economy is highly dependent on domestic demand, with consumer spending accounting for 70% of GDP. When consumers' wallets tighten, corporate income and investment will decrease accordingly, and the entire economy will fall into a vicious cycle. The slowdown in the US economy will not only affect the country, but also the global market. With global economic growth stagnating and resource competition intensifying, the US economic outlook is even more severe.

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