For the foreseeable future, the US economy could face a “sudden halt” and further contraction amid a sharp rise in employment and record low unemployment. An increase in income may not lead to an increase in citizens’ spending, which may slow down the development of production in the country. opens the words of former US Treasury Secretary Lawrence Summers Bloomberg.
The number of employed citizens in the United States increased by 517,000 last month. At the same time, the country’s unemployment rate fell to 3.4%, the lowest level in more than 50 years since 1969.
“The key question after the U.S. wage hike is will it be all the revenue that will get the economy back up? Or companies will at some point conclude that they have too many employees and too much stock of resources. In the final scenario, we could see a pretty abrupt stop in the American economy,” Summers warned.
It has also allowed for the possibility of widespread layoffs at American companies, following the recent example of thousands of job cuts at large tech businesses. In this scenario, the US economy may face a rapid decline.
5 January International Monetary Fund (IMF) First Vice-President Gita Gopinath taken into account Early remarks on overcoming the inflationary crisis in the US. In this regard, he advised the leadership of the US Federal Reserve System (FRS) to continue its policy of increasing the key rate, thereby tightening monetary policy in the country.