Breaking down the U.S. economy's mixed signals - YouTube

you've heard all about it inflation recession  an economic future that's uncertain at best  

we asked our john dickerson to turn to the pros  

in the world of economics there's the macro i  would say for sure the economy has overheated  

and the micro prices are up interest rates are  up and the gas prices are and you can understand  

why so many people are worried the big picture  everybody is saying where is the economy going  

and i think a good point to make is it's hard  to predict the future but right now it's hard  

to predict the present and the smaller picture  for each household even if you're doing well  

when you hear recession when you hear inflation  at a 40 year high that makes you feel like well  

what's going to happen to me to look into the  economic fog from different angles we talked  

with lloyd blankfein formerly the ceo of goldman  sachs and now it's senior chairman and michelle  

singletary author and washington post personal  finance columnist my colleagues and i are acutely  

aware that high inflation imposes significant  hardship jerome powell chairman of the federal  

reserve announced on wednesday that the fed is  again raising interest rates to combat inflation  

which in june stood at 9.1 percent over a year  ago the biggest increase in more than 40 years  

it is essential that we bring inflation  down to our 2 percent goal if we are to  

have a sustained period of strong labor market  conditions that benefit all and on thursday the  

government reported that the gross domestic  product fell for the second straight quarter  

a signal that the economy may be in a recession  though we'll have to wait months to see if the  

economists assign that formal term there's a not  insubstantial chance that we have a recession  

i don't think it's baked in the cake some people  say we're already in a recession a lot of people  

say a soft landing is very very unlikely soft  landing that's what the federal reserve is trying  

to engineer raising rates to cool the economy  without initiating a job-killing recession it's  

very hard to do in most recessions you don't have  a soft landing the fed tightens and jobs are lost  

companies you know not only reduce their hiring  plans they shrink we're starting from a different  

place the financial system is in good shape  there's more jobs and there are people to fill  

those jobs constantly people are hearing about how  bad things are how much attention should they pay  

to what the federal reserve does what the gross  national product is when they're making their  

financial decisions it is very important to pay  attention to it what the fed is doing is trying  

to beat back inflation and so by raising rates  it's going to cost you more if you need a mortgage  

it's going to cost you more if you need an  auto loan it's going to cost you more if you  

are carrying credit card debt so how did we  get here do you think we're in a classical  

economics 101 moment or is the current situation  the economy the result of the pandemic supply  

chains that were disrupted because of the pandemic  or are those really the same thing well 50 years  

from now when they write about the history of  the period they'll put it in its place and it'll  

fit nicely neatly in the pattern but where i'm  sitting now it seems you know quite different  

we shut down the economy people were kept out  of their jobs it was like you shut off a valve  

it wasn't the natural order of things the  unemployment rate now stands at 3.6 percent  

about where it was before the pandemic  and almost 50-year low yet 58 percent of  

americans are believed to be living paycheck to  paycheck that's the category that is the most  

difficult it makes me tear up because people  are like well what do you advise for them  

and i i wish i had a pack answer but i don't other  than you gotta spend smarter save whatever you can  

and perhaps you know housing that's one  of the biggest areas of people's budget  

if you can live with someone or have a roommate  single terry and her family live that advice her  

three twenty something kids live at home saving  their money instead of putting it toward rent  

but if you're feeling comfortable says singletary  don't take rash action selling stock that over  

time will rebound if you keep it and keep spending  she worries the public might slip into a doom loop  

which will scare the country into an even worse  economic spot those are the folks we need to not  

panic because we need you to spend we need you  to go out to the restaurants and when you go out  

tip that server more than 20 you know be  generous you can't afford to be generous  

because if they pull back the very thing that  we're trying to avoid which is a deep recession  

will happen we might go into recession we might  not but if i were managing the risk in my old  

job managing the risk of a big building or in  my household if i thought there was a 30 chance  

let alone a 60 chance of a severe slowdown you  know i'd be starting to get very conservative  

about what i spent what difference does it  make whether lloyd blankfein thinks is a 70  

chance or a 30 chance a 30 chance is a very  big risk to go to sleep with every night  

and worry about what might happen in the next  week or the next couple of months singletary is  

the director of a ministry at her church where she  helps parishioners with their finances recession  

or no recession she has one consistent sermon the  one thing i hope that we learn now and through  

every type of economy is to not rely so much on  debt we are living the american dream on borrower  

money yeah we borrow for our homes we borrow our  cars we barter send our kids we borrow to go on  

vacation we even borrow to eat a meal out when we  put it on a credit card and then when we have an  

economic downturn people don't have a cushion and  so i try to get people to hate debt i hate debt  

i hate debt so much if it was a person i'd  slap it that's how much i hate it could fear  

of a recession actually cause a recession right  now we're on a recession or the front end of a  

recession i'm tired singletary and blankfein agree  on this there is a glut of economic and political  

punditry that makes people jittery while you're  living in the micro they advise taking the macro  

long-term view because over time the us economy  has always recovered the system we have is kind of  

nimble and resilient you're always anxious about  things that are unresolved compared to things  

that happened in the past that are already in the  canon already in the history books and you know  

the world didn't come to an end don't panic  well no you know what patty go ahead scream  

go ahead go ahead let it out because we shouldn't  tell people not to panic it's human to panic when  

you see all these headlines but don't act on  that panic in a way that will be worse for you