Although it seemed like the U.S. economy was headed toward a soft landing after the long fight to cut inflation and dodge recession, several recent developments suggest it may have reached a tipping point.
A recent hiring slowdown and a rise in unemployment filings have made consumers more hesitant to take big vacations or embark on home improvement projects, the WSJ reports. While economists expect the Fed to approve cutting interest rates at its next meeting in September, worries about a slowdown and anxiety about job security might be outweighing the benefits of lower interest payments, one expert explained.
This anxiety doesn’t bode well for businesses, as consumer spending makes up about two-thirds of the U.S. economy. Several companies have felt that pullback as their corporate earnings reports have dropped sharply, including Disney, Monster Beverage, and CSX, which moves freight along the U.S. East Coast.
For now, companies may just wait it out until consumer confidence rebuilds, as they don’t want to risk laying off staff and tipping the boat even further.
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