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Lately, it feels like when it comes to the economy, we’re all sort of anxiously holding our breath. Waiting for inflation to cool or waiting for a recession to come or waiting for anything significant to happen that’ll tell us where things are headed. But as we wait, the economy isn’t. It keeps going.
I called a bunch of economists today and asked them to describe the economy right now in one word. Here’s what I got:
“I would probably use the word ‘uncertain,'” said Laura Gee, an economist at Tufts University.
“Mixed,” said Justin Wolfers, an economist at the University of Michigan.
“Jumbled mess,” said Mark Zandi, chief economist at Moody’s Analytics. That’s two words. But we’ll let it go.
Zandi said he called it a jumbled mess because all the economic data is pointing in different directions.
You hear us talk about it all the time — high inflation, lower gross domestic product, rising wages, understaffed businesses that are also putting freezes on hiring.
It’s starting to get old.
“Here’s the thing,” he said. “We’ve been stuck here for, you know, it feels like almost a year now. People feel that.”
In the past couple of years, the economy has gone through a rapid recession and a stunning recovery. So waiting for things to either improve or get worse can feel agonizing.
And while we’re waiting, there are constant reminders about potential doom. Gasoline prices are rising again after falling for a few months. A trip to the grocery store isn’t much more promising.
“I had a long conversation with some friends the other day about hummus costing $7,” Gee recounted.
A tub of hummus, a cup of coffee, an hour of child care. Gee said all the little data points we collect in our personal lives add up to real action. Or inaction.
“When we don’t know our life’s script, we may want to put off making major investments,” said Wolfers.
Should you move to a new city after graduation? Should you retire this year? Is it time to leave your job? Have kids? Buy a house? While we’re waiting for the economy to give us hints, we’re actually impacting the economy.
“In a weird, ironic, dark, I guess, ironic way, the fact that we’re nervous and cautious and not letting loose is probably a good thing,” Zandi said.
The Federal Reserve is raising interest rates to curb spending and cool inflation. So our lurking on the sidelines of this economy may actually help get us somewhere.
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