BURLINGAME, Calif. (KRON) – In more troubling news for the economy, the Bureau of Economic Analysis says the nation’s gross domestic product fell 0.9%. That’s the second quarter in a row the economy has shrunk.
While these signs are troubling, a recession is not inevitable. Either way, a lot of people say it doesn’t matter because there’s not much they can do about it.
For months, inflation has pushed the prices of almost everything up and the markets have been trending downward since late last year. Now that the Federal Reserve is raising interest rates to combat inflation, there’s concern the country could be headed for a recession, if we’re not already in one.
Despite the bad news, the unemployment rate remains low, at 3.6 percent, and companies continue to add jobs. For those reasons, many economists say that a recession is not inevitable.
“You have to incorporate people working and the unemployment rate is really low,” said George Noceti, a wealth advisor with Morgan Stanley. “When the rate gets high and we have a decrease in earnings in our economy, then we are arguably in a recession, but we have some time.”
In Burlingame on Thursday, most of the people KRON4 talked to say they have noticed the high prices but don’t feel there’s much they can do about it. They’re just trying to ride out the ups and downs.
“Of course, I see some stuff becoming more expensive and I just try to rebalance,” one citizen said. “Maybe less take out.”
As for how long inflation will be a problem, no one knows for sure. But some economists are hoping that things will start to improve this fall.
“September we believe inflation will be coming down,” Noceti said. “The next raise will be about 50 basis points and at the end of the year be about 3.65 percent.”
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The next meeting of the Federal Reserve is set for mid-September.