Inside the 2 sides of America's recession debate: From Jamie Dimon predicting a 'hurricane' to a Harvard economist completely unworried about a downturn
But all things considered, the American economy is fairly strong at the moment. The labor market is historically hot, with wages climbing at the fastest pace in decades and plenty of jobs to go around. But inflation stands to squander the progress made over the past two years. Prices are climbing at the fastest pace since the 1980s, forcing theThe central bank is trying to engineer a"soft landing," a win-win situation in which inflation cools but unemployment remains low.
Former Treasury Secretary Larry Summers was among the first liberal-leaning economists to sound the alarm. As the stimulus package made its way through Congress, he warned that it risked triggering inflation by overheating the economy. Now, he believes a recession is possible within the next two years due to a combination of stubborn inflation and low unemployment.
Not all recession outlooks call for a crippling downturn. Some of the loudest voices in economic forecasting see a much more shallow recession on the horizon. Others are still hopeful the US can avoid a slump entirely. Americans' spending has also held strong throughout the inflation surge. That's yet another sign the recovery can push forward unscathed, Jason Furman, a former top economist in the Obama administration and an economics professor at Harvard, toldSpending counts for about two-thirds of all economic activity, making it a critical fuel for the recovery. With demand showing little sign of easing, growth is likely to push forward, Furman said.
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