The Richcession Keeps Rolling

[Zorro]

The chances that the U.S. will plunge into a recession this year are slipping. But the richcession? It’s still rolling.

The economy keeps chugging along, adding jobs and growing despite still-high inflation and Federal Reserve rate increases. But for many richer Americans, it probably feels like a recession has already begun.

The Commerce Department last Thursday revised higher its assessment of first-quarter gross domestic product—it now says GDP grew at a 2% annual rate, versus its previous estimate of 1.3%. Economists meanwhile are busy moving up their estimates for second-quarter GDP growth.

Yet while the better-off are, by definition, better off than the poor, they have been hit harder by layoffs, have been less able to secure wage increases that keep up with rising prices and have been more affected by the slump in profits that began to take hold last year. In other words, it is still looking like a richcession, where amid economic uncertainty, the rich feel more of the sting. And this, in turn, is beginning to have knock-on effects, with richer Americans reining in their spending relative to others.

Layoffs are still making headlines, and they are still disproportionately affecting higher-earning workers. By the count of outplacement company Challenger, Gray and Christmas, about one-third of layoffs announced by companies this year have come from tech firms such as Facebook parent Meta Platforms, where the median employee made $296,320 in 2022. Job cuts elsewhere have been aimed at higher-paid workers, such as at Ford Motor, where planned layoffs are concentrated in the engineering ranks. Meanwhile, overall layoffs have remained low. Labor Department figures showing that even though the number of people in the workforce is higher than before the pandemic, fewer people are receiving unemployment benefits.

https://www.wsj.com/articles/the-richcession-keeps-rolling-9a2ba848?st=b16b1504kii6r3z&reflink=desktopwebshare_permalink

Pity the poor rich...

[wryter2000]

1. High earning and rich aren't the same

Filthy rich people don’t make their money through work

[marble falls]

2. The Fed now predicts a soft landing and no recession

The Fed now predicts a soft landing and no recession
In their June forecasts, Fed officials said they expect the unemployment rate to rise only slightly to 4.1%
By
Nate DiCamillo
PublishedJune 14, 2023


The Federal Reserve changed its mind about the potential for the US to experience a soft landing.

https://qz.com/fed-predicts-no-recession-june-forecast-1850540067

In their summary of economic projections, Fed officials signaled on Wednesday (June 14) that they think the US won’t hit a recession this year, as they decided not to raise rates in June. The summary also says inflation will end up being higher than what officials first guessed in March.

Previously, Fed officials were predicting that the unemployment would rise to 4.6% from 3.5%. In the eyes of some economists, a rise in the unemployment rate of more than 1% was seen as the Fed essentially trying to engineer a recession to bring down inflation.

Those same officials now predict that the unemployment rate will rise to only 4.1% (from the current 3.7%) by the end of the year.

The officials also more than doubled their median forecast for gross domestic product in the US, projecting that it will move up by 1% instead of 0.4% this year.

The median projection is for overall inflation (as measured by the personal consumption expenditure index) to fall to 3.2% from the 4.4% it was in April.

-snip-

[Johnny2X2X]

3. Biden is dismantling Trickle Down Economics

Now president has done more for working people than Biden has since FDR.