Recession concerns amid strong economic growth, how inflation is affecting consumer spending habits, small business actions in Washington, and innovation in farming are among the top business news items from the past week.
Economic growth vs. instability
Economic growth in the United States has been strong during the recovery from the COVID-19 pandemic, including healthy sales and wage growth. The most recent jobs report from the Labor Department shows a net gain of 431,000 positions in March, while initial jobless claims remained at historic lows.
Yet economists have also raised concerns about a possible recession due to ongoing instability occasioned by inflation, higher oil prices, and the war in Ukraine. However, most forecasters don’t expect a recession to occur this year, although there are consistent predictions of slower growth compared to 2021.
Inflation and spending habits
At their March meeting, Federal Reserve policymakers said they are looking to a more aggressive approach to control inflation. Steps could include several half-point increases, which would make it more difficult for businesses to borrow money.
Inflation has also been impacting consumer habits, with everyday shoppers buying products in smaller quantities or switching to less expensive brands. A recent survey from CNBC and Acorns Invest in You found that three-quarters of respondents believe inflation will affect their financial decisions in the coming months, with more than half saying they have started to dine out less.
The Biden administration has extended its moratorium on federal student loan payments through Aug. 31, saying the move is intended to avoid delinquencies and defaults among borrowers who continue to face significant economic hardships.
Small business in D.C.
The Small Business Administration has announced expanded efforts to recover fraudulently used COVID-19 relief funds and prevent fraud in future programs, including a new special counsel and oversight board for this purpose.
In Congress, Senate Republicans have put forward a set of laws intended to small business development. Some bills in the package have already been introduced and won bipartisan support, including a proposal to require the Securities and Exchange Commission to research how to improve access to private capital in rural areas.
In agricultural news, the New York Times released a feature on the promise and challenges involved in vertical farming. The industry is expected to grow significantly in the near future, although it also faces headwinds such as the energy costs involved in growing crops with artificial lighting.