Back-to-back GDP slowdown, Fed doubling down, a cooling jobs market, red-hot prices and tech’s big bang, here are the main economic highlights from a busy week.It was an eventful, data-packed week for the US economy.
The Federal Reserve, the country’s central bank, raised interest rates by 75 basis points on Wednesday, the second time in as many meetings, in the hopes that higher borrowing costs help balance supply and demand. On Thursday, gross domestic product (GDP) estimates indicated that the US economy contracted for two consecutive quarters, stirring concerns that the country may be headed towards a recession.
On Wall Street, some of the biggest names in American industry including Apple, Amazon, Microsoft and Google-parent Alphabet released better-than-expected earnings and forecasts, sending stocks higher. Other data showed that the US labour market is still very tight despite companies announcing layoffs.
After printing trillions of dollars during the pandemic’s peak to stimulate the economy and soften the shock on companies and households, US annual inflation is now at a 40-year high and there are indicators Americans are feeling the pain. Consumer spending, which accounts for more than two-thirds of all economic activity, may be in decline and retailers are bracing for the pullback.
Here are the main economic developments from a busy week:
Walmart lowered its profit outlook for the second quarter and the full year on Monday, underscoring that rising prices for food and gas are causing consumers to spend less on goods like apparel that have greater profit margins. By Tuesday …