In recent years, the economic situation in the United States has put unprecedented pressure on the younger generation. High housing prices have made it difficult to buy a house, fewer job opportunities, stagnant wage growth, and rising prices have further increased the cost of living. At the same time, credit card debts have continued to rise, and many people are in debt. Economists and Wall Street analysts have begun to worry about whether the United States is on the verge of a recession. Especially since July 2023, discussions about a recession have gradually heated up, and more and more data show that the possibility of a recession is increasing. Today, we will explore the reasons behind these phenomena and the challenges faced by young Americans.
A recession usually refers to a sustained decline in economic activity. Indicators for measuring a recession include GDP, household income, unemployment rate, and industrial production. When these data continue to deteriorate, a recession may become a reality. Although the latest US GDP grew by 2.8% in the second quarter, which seems to be a decent economic performance, the hidden problems cannot be ignored. For example, the unemployment rate has risen slightly, the manufacturing industry is weak, and consumer spending is not as good as before. All these signs indicate that the economy is not stable. Young people in particular face a severe employment situation, stagnant wage growth, and rising living costs.
Although official figures show the unemployment rate remains at around 4%, many young people are finding it harder than ever to find work. Many people choose to give up looking for work, or turn to part-time and temporary positions. These are not reflected in the official unemployment rate, and the actual situation is worse than the data indicates. Since 2022, real income growth has slowed significantly, and inflation has further exacerbated life pressures. Wages have barely increased, working hours have declined, and many young people are facing a lack of income. At the same time, the total amount of credit card debt has exceeded 1 trillion US dollars, and the average interest rate is as high as 24%, causing many young people to rely on credit cards with high interest rates to maintain their lives and fall into a debt crisis.
Currently, the United States is in the downward phase of its economic cycle. As early as 2019, the inversion of Treasury yields had already foreshadowed the hidden dangers of the economy. The current recession is just a concentrated outbreak of long-standing problems. The US economy is highly dependent on domestic demand, with consumer spending accounting for 70% of GDP. When consumers begin to cut spending, corporate revenue and investment will decrease accordingly, and the economy will fall into a vicious cycle. The slowdown of the US economy will not only affect the domestic market, but will also affect the global market. Against the backdrop of stagnant global economic growth and increasingly fierce competition for resources, the US economic outlook appears even more severe.
In general, young people in the United States are facing huge economic challenges: high housing prices, difficulty in finding employment, declining income, debt pressure, etc. The main reasons for the economic recession are the downward trend of the global economic cycle and weak domestic demand. If these problems cannot be effectively resolved, whether the United States can achieve a soft landing and avoid a more serious economic crisis remains uncertain. #美降息25个基点预期升温 #美国8月核心CPI超预期