The paradoxical US economy – too many jobs, too much inflation, too many worries

If there is one system in which Americans are undoubtedly the leaders of the world, it is their talent for creating an equally strange term for every situation, however strange it may be. The recent downturn in economic activity in the United States, for example, is not discussed simply under the mundane heading of “recession.” Instead, we are talking about “functional bioactivity” – a combination of two previously nonexistent words intended to describe a very peculiar condition: on the one hand, after two good years of coronary paralysis, people are storming shops, restaurants, airports and hotels and thus taking care that the rate of Unemployment has fallen to 1969 levels at 3.5 percent. On the other hand, even those citizens who are doing well find the general economic situation unsatisfactory. In contrast, the situation is grim for President Joe Biden, who has been punished for months with approval rates that not even his predecessor Donald Trump had experienced.

But how could that be? First of all, the fact is that the GDP has recently shrunk in two consecutive quarters. This means that at least one criterion for declaring a recession has been met, so people’s pessimism seems justified. One of the reasons for the economic downturn is the aggressive rate hike policy pursued by the US Federal Reserve (Fed), which on its part is trying to control the massive increase in the inflation rate over the past year and a half. As the Bureau of Labor Statistics announced Wednesday in Washington, the cost of goods and services increased on average by 8.5 percent in July from the previous year. While the rate is down from June (9.1 percent), rates are still rising four times faster than the Fed wants.