What you should know about the current US economy
Image: UPenn Wharton
Third-quarter earnings season is fully underway this week, with more than 50 S&P 500 companies reporting results. And while overall S&P 500 profits have fallen year-over-year in each of the previous three quarters, early results from Q3 indicate corporate America could see an end to that streak.
Other things you should know about the current state of the US economy:
✈️⛽ Travel and transportation: Delta, United, and American Airlines each reported earnings over the past week that showed strong US travel demand in Q3. However, all three companies also warned of weaker profits and higher prices in Q4 due to the rising cost of jet fuel following OPEC+ oil production cuts over the summer (gas prices nationwide rose to a 10-month high of $3.85 per gallon in mid-August following OPEC+’s announcement). But over the past two months, prices have declined like a debit card with no funds to the current national average of $3.55 per gallon.
🛍️ Retail and the US consumer: Retail sales rose 0.7% in September from the previous month, more than double Wall Street economists’ initial estimates. The unexpected surge in growth comes despite mounting headwinds facing US consumers, including record-high interest rates for credit cards, the resumption of student-loan payments, and an overall decline in savings.
🚚📦 Freight and shipping: This week, rail and trucking giants Union Pacific and JB Hunt both reported declines in freight volume and revenue last quarter due to a decrease in business demand. FedEx downgraded its full-year revenue forecast for similar reasons in its earnings report late last month.
🏦 Interest rates and inflation: In public comments yesterday, Fed Chair Jerome Powell said US inflation (3.7% in September) is still too high for the central bank’s liking, but didn’t indicate whether it will implement additional interest-rate hikes in the coming months. Futures market traders currently predict a near-zero chance of a Fed rate hike in November, and a 30% chance rates will be raised in December.
📊 Flash poll: To all working professionals: would you consider the growth outlook in your industry/sector of the economy to be positive or negative over the next 12 months?
See a 360° view of what media pundits are saying →
Sprinkles from the Left
- Some commentators argue that the US economy’s recent recovery from elevated inflation is nothing short of remarkable, and that while there may be more bumps ahead, the Biden admin and federal government deserve praise for the way they’ve handled things.
- Others contend that while many economic indicators point to a thriving US economy, there’s still a risk that consumer confidence and other economic “vibes” decline so much that they threaten to become self-fulfilling prophecies.
- “How Goldilocks Came to the U.S. Economy” –Paul Krugman, NY Times
- “Risks Are Growing of a Double-Dip ‘Vibecession’” –Jonathan Levin, Bloomberg
- “The US Economy Is Dynamic Again, But Will It Last?” –Allison Schrager, Bloomberg
Sprinkles from the Right
- Some commentators argue that the US economy isn’t doing so well for the average American, who can’t afford to buy a new car or a new house anymore, and that if things don’t turn around within the next year President Biden will have a very difficult time getting reelected.
- Others contend that the US economy has actually been performing surprisingly well in recent months, despite many Americans’ pessimistic attitudes towards President Biden’s overall handling of the economy.
- “The Brutal Reality of the Biden Economy” –Jim Geraghty, National Review
- “The Economy Is Great. Why Do Americans Blame Biden?” –Alan S. Blinder, WSJ
- “Biden’s economy is not enough to deliver White House to Trump” –Peter Morici, Washington Times
Share this!
Recent Discussion stories
Discussion
| October 18, 2023America’s migrant crisis is spreading from the southern border
🇺🇸 Major US cities from coast to coast are struggling to accommodate an influx of migrants who initially entered the US via the southern border, then were sent on buses across the country.
Discussion
| October 16, 2023What happened over the weekend in the Israel-Hamas conflict
📝💥 Click to see a comprehensive list.
Discussion
| October 13, 2023An update on the Israel-Hamas war
💥 Israel continued to target the Gaza Strip with airstrikes early this morning, as the ongoing war with Palestinian militant group Hamas entered its seventh day.
You've made it this far...
Let's make our relationship official, no 💍 or elaborate proposal required. Learn and stay entertained, for free.👇
All of our news is 100% free and you can unsubscribe anytime; the quiz takes ~10 seconds to complete