We’re halfway into 2023, and so far it’s been a confusing year for the economy. The unemployment rate is low, the job market is strong, and yet it seems like we hear about a new round of mass layoffs every week. Inflation has cooled off this year, but we’re still well above the Fed’s target inflation rate of 2%. Then there’s the ever-looming “r-word,” recession, which we’ve been talking about on this show as far back as last June — but so far, it hasn’t materialized, and a few leading economists recently told CNN that although we may see a recession eventually, it looks like it’s not going to happen in 2023. We’ve also lived through the failure of three major banks holding a total of $532 billion in assets, as well as a debt limit crisis that threatened to collapse the U.S. economy — and was very fortunately avoided in the final hour. All of this is a lot to keep up with, and if you’re confused about what all of this economic news means and what you should do with your money, you’re not alone.
READ MORE FROM OUR INTERVIEW: What’s Really Happening With The Economy Right Now
Journalist Catherine Rampell helps us take a look at what today’s economic news means for us, and what could happen this year and next. Listen in to hear her answer some of the looming questions about the economy and how they affect all of our money decisions, big and small.
Catherine says many people feel their budgets are tight right now, and that’s to be expected. Early in the pandemic, there was a lot of government support for things like the expanded child tax credit and several rounds of stimulus checks. These enabled people to have better living standards and created a surge in U.S. consumers buying more items for the home, because they weren’t spending money on travel or nights out on the town. “Given price growth and the end of a lot of these policies, people have run down their savings, and they feel like they’re behind,” she says.
Two weeks ago, however, the Fed finally took a pause on raising interest rates, which should mean good news for our wallets, or at least a postponing of further interest rate hikes. “If you have to make a really big purchase that requires financing, do it,” she says, but “if you don’t have to, you might want to wait.” She shares her reasons for moving with caution.
Thankfully, she does feel positive about the economic news to come further in 2023, particularly in a few key areas. She thinks it’s great that unemployment has remained near historic lows. And best of all? Women are doing really well in this economy. “Among prime working-age women, a record share of them are in the labor force,” she says. This is especially positive news given the She-cession we went through during the pandemic. The surge of women in the workforce could be due to the uptick in fully remote work, making the balance of a career and a family more manageable than ever.
In Mailbag, we hear from a listener who has a chronic progressive disease and is wondering how to negotiate a settlement and spousal support. In our money tip of the week, is 2023 the right year to buy a home?
More on HerMoney:
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- What To Do If You’re Worried About A Layoff
- Freezing Your Credit Is Free: Here’s How To Do It
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