Cracks are forming in the US economy
By: Allan Wang
Recently, executives from some of the biggest tech corporations all attempted to answer questions about the economy, which is currently on the edge of recession. In Silicon Valley, profits have been going higher, but they still expect things to get tougher in 2023 as they continue to raise prices on their products. Mastercard, a credit card company, said that spending was steady among the wealthy but slowing down among lower-income customers.
Walmart and Best Buy both expect earnings in August to be lower than predictions, and Amazon says that while they are recognizing growth, they believe things could change quickly. Government economic indicators reported last week that there has been a dip in domestic products and a slight increase in customer spending, showing that the US economy is in a weird spot. People are still spending their money, but, due to inflation, it’s more on necessities, such as gas and food and less on other things like clothing. Unemployment is still low, yet companies are hiring slowly, and some are beginning to lay off people.
The Federal Reserve raised rates in order to make it harder for people to borrow money, in an attempt to slow inflation and stabilize the economy. “
As high inflation has continued and consumer sentiment has deteriorated, customer demand within the consumer electronics industry has softened,” said Best Buy chief executive, Corie Barry. Thomas Combs, a 52 – year – old small business owner living in Dallas says he’s “completely changed the way he spends”, spending much less on things to appease him like gourmet and electronics, instead using more of that money to buy gas and repair his car.
As 32 – year – old Shannon Villa, an Amazon warehouse worker put it “I can’t control the price of eggs or milk. If it goes up it just goes up. I still need it for family,” he said in a message.
“Gas goes up, I still need it. I can’t afford to complain. I just got to adjust.”