Al-Marsad newspaper: Many questions were raised regarding the fact that America entered a recession, most notably “Is America regarding to enter a recession? And the most prominent warning signs that began to appear.
Among the most prominent signs that America is entering a recession, the tepid stock market, rising inflation, and high interest rates have left Americans less optimistic regarding the state of the economy.
Consumer sentiment has slumped to a record low, according to a University of Michigan survey last week, fueled by frustration over price hikes.
Earlier in June, the Consumer Price Index jumped to its highest level in 40 years, as the government’s core inflation gauge saw prices rise 8.6% over the past 12 months.
The Federal Reserve is raising interest rates at a robust pace as it looks to slow economic activity, with signs of economic contraction starting to appear everywhere, in sectors from basic commodities to housing.
Prices of the metal reached a 16-month low on Thursday following dropping more than 11% in two weeks, and this is bad news for investors who view copper prices as a leader in the global economy, according to CNN.
Copper is widely used as a building material, and faces increased demand in an expanding economy.
This demand disappears when the economy contracts. Prices rose earlier this year when Russia, which accounts for 4% of global copper production, invaded Ukraine.
Traders who were concerned regarding a shortage of supply began stockpiling the metal. Now, copper prices are falling. The index released Thursday also found that US private sector production slowed “sharply” in June, while Chris Williamson, chief trade economist, said non-essential goods producers are seeing lower orders as consumers struggle with higher prices.
Sharp interest rate increases by the Federal Reserve are denting the mood further, and a closely watched University of Michigan survey released on Friday found that US consumer confidence hit a new record low in June – a lower A level recorded since the university began collecting data 70 years ago.
The June index has seen a 14.4% drop since May as consumers become increasingly concerned regarding inflation, with regarding 79% of those consumers saying they expect bad times for business conditions next year, the highest level for this measure since 2009, when US drivers felt the pain. Due to the price hike, they started dropping gasoline this spring, reducing demand and lowering the price.
While the dip in demand may bring temporary relief, it also points to broader economic concerns, and prices have skyrocketed, putting home ownership out of the reach of many Americans.
Mortgage interest rose following the Federal Reserve increased interest rates and increased bond yields. Despite the slowdown in the housing market, experts hope it will not spread to the economy the way the housing bubble burst in 2008.
