U.S. inching closer to recession

by Tom Cole

For more than a year, the heavy weight of a struggling economy has been crushing Americans. While President Joe Biden and Democrats have continuously brushed off or attempted to shift blame over the warning signs of a potential recession, a recent report from the Bureau of Economic Analysis alarmingly showed gross domestic product (GDP) is indeed declining. That means there is no denying that the U.S. economy is in fact shrinking and moving toward a recession. 

Although we already have witnessed job numbers below expectations and inflation at a 40-year high, the current state of America’s GDP reveals more about the overall health of the economy since it is used to measure the overall value of goods and services produced. A decline of 1.4 percent in the first quarter of this year is the weakest showing since coronavirus pandemic recovery began. This is a clear indication that Democrats’ far-left policies and out-control-spending, both advanced and proposed, are not working. 

While the last recorded economic recession took place in 2020, when the coronavirus pandemic drove mass shutdowns and layoffs across the country, we have since seen some periods of turnaround, recovery and a steady return to normal life. With a life-saving vaccine and infection rates down tremendously, Americans should get back to work and back to normal life. However, with record-high inflation, Americans are paying more for groceries, fuel, household items and just about everything else. This year, inflation is estimated to cost the average household in the United States more than $5,000 and is already costing the average American family an extra $327 a month.

As prices continue to climb, households may pull back on spending and businesses may halt hiring and stocking their inventory. In fact, the National Federation of Independent Business (NFIB) released a recent report showing that inflation is the top concern for small business owners.

In fact, 62 percent reported that inflation is having a substantial impact on their businesses. Additionally, in the same report, 86 percent of small businesses have already raised their prices and 68 percent plan to raise the prices as costs continue to go up.

Finally, while everything costs more, the wages of hardworking Americans are not keeping up. Since President Joe Biden assumed office and Democrats took control of Congress, real wages have decreased nine out of 13 months.

And since President Biden’s first full month in office, real wages have declined by more than 3 percent. To be more precise, real average hourly earnings decreased 2.7 percent, seasonally adjusted within a year, from March 2021 to March 2022. 

These economic trends are pointing to one thing – a coming recession. However, instead of changing direction and working with Republicans to solve and overcome our economic challenges and make life better for Americans, President Biden and Democrats are doubling down on policies that have proven disastrous. Americans have already been dealing with the crushing burden of rising prices and supply chain issues for nearly a year, and the recent report of a shrinking economy only shows we are inching closer and closer to a recession every day.