It may seem odd to describe the U.S. economy as a strong one, with GDP contracting in the first half of the year and a cratering stock market. The current reality is that highly profitable firms are hiring a record number of workers and paying them higher wages. If it didn't cause inflation, this would be good news. The risk of a recession has become more accepted by the Fed. When a recession looms, executives retreat behind the moat, pull up the drawbridge, and cut production, investment, and the workforce in order to fortify the balance sheet and ride out the storm. At a time when rivals will be distracted, this alone would not be a good idea.
Despite a growing risk of a recession, the U.S. economy continues to exhibit remarkable strengths, particularly in the labor market, as shown by continued job creation and another drop in the unemployment rate in the September 2022, jobs report.
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