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A classic rule of thumb used to define a recession is that the economy is in recession when it experiences two consecutive quarters of negative GDP growth. The U.S. economy met this definition in the first half of 2022, contracting 1.6% in the first quarter and 0.9% in the second. While every recession that has hit the United States in the last century saw a significant increase in unemployment, job growth has been exceptionally strong this year. Jon Hilsenrath of the Wall Street Journal used the expression “jobful downturn” to refer to the current environment. The unusual situation raises the question: how will the impacts of a potential “jobful” recession differ from previous downturns?

The United States added 528,000 jobs in July, outpacing an already strong May and June, and making it likely that the Federal Reserve will continue its policy of large rate hikes. The latest jobs report has allayed recession fears in the short term and clears the way for the Fed to continue hiking interest rates in hopes of halting inflation. There is concern among economists about the impact of additional rate hikes, however. While the jobs report suggests the economy is not currently in recession, tight monetary policy could pose a risk for the future. Rate hikes have already caused higher mortgage and loan rates for consumers and businesses. More hikes will lead to an even higher cost of borrowing. These aggressive rate hikes also ...

The Federal Reserve has raised its targeted federal funds rate by 75 basis points, Chair Jerome Powell announced at a news conference on July 27. July’s tightening is the latest aggressive action the Fed has taken as part of its “war on inflation” this year. The Fed aims to reduce inflation to 2 percent from its June level of 9.1 percent. Powell stated that economic growth must be slower in the coming years for the economy to reach that target. Powell’s remarks made it clear that the Fed believes inflation is the biggest problem facing the U.S. economy. However, the rate hike comes at a time when many Americans fear a coming recession or believe the economy is already in one. The day after Powell’s news ...

Aaron N. Gruen, principal of the urban-economics, market-research, land-use policy, and pre-development services firm Gruen Gruen + Associates, shares his thoughts on how to combat skyrocketing gas and housing costs.

Investing in transportation infrastructure stimulates economic growth by making systems more efficient and reliable, thereby increasing productivity by increasing connectivity, reducing congestion, and decreasing the cost of moving goods and services. An effective transportation system gives companies a competitive advantage and access to the global economy, and is fundamental to sustainable economic development.

The U.S. economy will experience strong growth of at least 4 percent GDP in 2022 as consumer spending continues and the bottlenecks caused by pandemic shutdowns begin to unsnarl. The multiplier effects of massive federal infrastructure and other government expenditures rippling through the economy, as well as capital market participants unable to resist utilizing their large store of dry powder, will also contribute to robust economic growth. Construction, transportation, and professional and business services sectors are likely to experience the greatest employment gains. While the retail trade and leisure and hospitality sectors will continue to rebound, many jobs in these sectors will not return. Strong job growth and high wage ...

As part of IEDC’s Take Action Against Racism in Economic Development series, the COVID-19 Equitable Economic Recovery for Cities, Local Governments, and Municipalities webinar explored why a focus on equitable recovery is so important, and how to take meaningful action. Tunua Thrash-Ntuk, executive director of LISC Los Angeles, led the discussion by exploring the three P’s set out by their Equitable Economic Recovery Toolkit, designed to “provide local cities and municipalities with tangible steps to ensure that their COVID-19 recovery is as equitable as possible.” The first of these three P’s is Place. Prior to the pandemic, an important way small businesses attracted customers was through their physical ...

As the American economy continues to recover from the recessionary effects of the pandemic, new challenges have emerged that may slow the speed of recovery. The trillions of dollars in stimulus spending has fueled increasingly high demand. According to The Atlantic, this extra consumer spending power, along with cutbacks in other areas such as travel and dining out, caused grocery spending in 2020 to exceed 2019 levels by $84 billion. However, although consumer demand has leveled out somewhat, suppliers are still struggling to keep up. Lingering social distancing rules have made production less efficient. As industries reopen, businesses are struggling to rehire workers at pre-pandemic wages, causing labor shortages. These shortages, ...