With inflation at a four-decade high, a growing number of forecasters worry the U.S. economy may be headed to a recession as the Fed gears up to raise interest rates aggressively.
The U.S. is expected to report record-setting economic growth in the most recent quarter. But that won't repair all of the damage done during the spectacular downturn three months earlier.
While retail sales bounced back in May after a deep drop in March and April, the wealthiest Americans are not spending as freely as they did before the pandemic. And that could limit the recovery.
The World Bank issues a report this week detailing the extent of the recession, the first caused solely by a pandemic. Its findings are sobering — but do offer a glimmer of hope.
The Fed leaves interest rates near zero as expected, and promises to use all of its tools to support the economy. Officials project unemployment above 9% at the end of this year.
The committee tasked with marking U.S. business cycles says the economy peaked in February and has since been in a recession triggered by the pandemic. But it says the recession could be short-lived.
Fed Chairman Jerome Powell warns it could be another year and a half before the U.S. recovers from the economic fallout of the pandemic. But he says this will not be another Great Depression.
The economy contracted in the first quarter of 2020 as the coronavirus began to take its toll and spending dived. It's the first quarterly drop in six years and a likely precursor to a deep recession.
The fallout from the coronavirus will be much worse than that of the financial crisis, the IMF says. The global economy is expected to shrink by 3% this year; the U.S. GDP could fall twice as much.
For the first time in nearly a decade, the economy suffered a net loss of jobs as the coronavirus began to take hold in the country. The unemployment rate shot up to 4.4%.
Forecasters say the government's aggressive efforts to slow the spread of the virus will trigger the sharpest slowdown in the economy on record. Some see GDP shrinking a staggering 24%.
The Labor Department says U.S. employers added 130,000 jobs in August, fewer than private analysts had expected. The unemployment rate was unchanged at 3.7%.
Manufacturing activity in the U.S. shrank last month for the first time in three years. Factories are especially sensitive to international forces, including the ongoing trade wars.
The Trump administration pushed back hard against warnings of an economic slowdown. But the president is also calling on the Federal Reserve to cut interest rates again to help boost growth.
Investors paused to catch their breath Thursday after the stock market suffered its worst drop of the year the day before. Consumer spending is still strong, despite signs of a looming recession.
For years after the Great Recession, employers were reluctant to boost wages. Now a tight labor market is giving workers the leverage they need to demand a larger slice of the nation's economic pie.
The bond market flashed an ominous warning Friday, as the yield on long-term government debt dipped below that of short-term bills. That unusual situation often signals a recession on the horizon.
