Understanding the State of the US Economy: Key Indicators in 2023

As the year 2023 unfolds, several economic indicators shed light on the current state of the US economy.

From inflation rates to job growth and home affordability, understanding these key indicators can provide valuable insights for individuals, businesses, and policymakers alike.

Inflation: Moderate Growth and Consumer Sentiment

According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) increased by 0.2% month-over-month in June, with an annual growth rate of 3.0%. While the monthly pace slightly picked up from May, the overall trend showed a decrease in inflation on an annual basis.

Excluding food and energy, core inflation also rose by 0.2% in June, the smallest increase in core prices since the summer of 2021. Consumer inflation expectations for the next 12 months fell for the third consecutive month to 3.8%, reaching its lowest level since April 2021. This decline indicates that consumers expect a slowdown in price increases in the near future.

Job Market: Steady Growth and High Optimism

The US added 209,000 new jobs in June, maintaining steady growth in key sectors like government, healthcare, and construction. Despite post-COVID era inflation and aggressive monetary tightening, the unemployment rate decreased slightly to 3.7%, just 30 basis points above its pre-pandemic level.

Job Openings and Labor Turnover: Mixed Data

Job openings decreased to 9.8 million in May, 496,000 positions below the April rate. Notably, there was a notable increase in layoffs and discharges in the retail trade sector. However, hires remained steady at 6.2 million, with notable increases in the durable goods manufacturing sectors.

Small Business Optimism: Recovering Confidence

The National Federation of Independent Businesses reported that small business optimism reached a seven-month high of 91 in June. The percentage of firms expecting worse business conditions over the next six months improved, and fewer firms reported difficulty filling job openings.

Foreclosure Activity: Rising Filings

Foreclosure filings increased by 13% in the first half of 2023 compared to the same period last year, approaching pre-pandemic levels. Certain states, including Maryland, Oregon, and Alaska, experienced significant increases in foreclosure activity.

Overall, these key economic indicators provide valuable insights into the current state of the US economy in July 2023. While certain sectors experience growth and optimism, others face challenges and uncertainty. As the economy continues to evolve, policymakers and businesses must carefully consider these indicators to make informed decisions.