With American families struggling under the weight of high food and gas prices, there may be more bad news in store for the new year. According to Breitbart’s Economics Editor John Carney, the worst may be yet to come.
Carney spoke on the Fox Business show of former Trump Administration economic advisor Larry Kudlow, and described how the United States may slip into recession in 2023. With high inflation on the horizon, this appears increasingly likely.
— CNBC's Closing Bell (@CNBCClosingBell) January 19, 2023
Carney isn’t the only person ringing the alarm bell. CNBC reported on a number of flagging economic factors as inflation takes hold in the economy. Large tech firms are laying off thousands of workers. Microsoft recently announced a layoff of 10,000 employees and Google announced a two-month delay to bonus checks.
The Federal Reserve is in a tight spot as inflation harms the American economy. Raising rates too quickly and too much may ultimately slay inflation, but would likely cause a recession. Not raising rates quickly enough– or not high enough– would likely result in a low-growth, high-inflation economy known as Stagflation.
The current period is the first since the 1970s and early 1980s to feature significant Stagflation. This came after a number of major spending packages in Washington, including President Joe Biden’s 2021 stimulus package, totaling $1.9 trillion. Previous low-interest rates are also contributing to the increased inflation.
American food prices have risen rapidly in the past year. This includes an ‘unprecedented’ crisis affecting the price of eggs. Many Americans have turned to shopping at dollar stores to make their food ends meet.
A full 71% of Americans said that rising prices have affected their households in 2022. Whether it is higher food or material prices, it appears that the effects of inflation will stay with the American economy well into 2023 or beyond.