The World Bank said today that most developing countries are likely headed toward recession, thanks to the war in Ukraine. Last week, JPMorgan Chase CEO Jamie Dimon warned of an impending economic hurricane. Gas prices, inflation, and interest rates are climbing.
But on an individual level, most Americans say they’re doing all right. More than two-thirds of U.S. adults said they could handle a $400 emergency with spare cash, according to a Federal Reserve report released last month. One Atlantic writer summed up the current mood: “Everything is terrible, but I’m fine.” So how should Americans navigate these confusing economic times?
Dean Baker, senior economist at the Center for Economic and Policy Research, says inflation and high prices for gas/oil are serious problems, but he separates them from the rest of the economy.
“We had 390,000 new jobs created in the month [of May]. We've had the fastest job growth really in the country's history in the last 18 months. The unemployment rate’s at 3.6%. These are all really, really good things,” he highlights.
He adds that the stock market, though it’s been volatile, doesn’t closely reflect the economy, and if people have invested money there, they must be prepared to see it go down.
“You have to plan ahead. So if you know you're going to need whatever amount of money come September for your kid’s tuition or whatever bill you might be paying, don't wait until September to sell your stock. Make sure you've cashed out some of it six months earlier, some of it three months earlier.”
Real estate is another issue people are concerned about — buying a house is difficult for most. Specifically in LA, when could a millennial possibly become a homeowner?
“We're seeing this huge explosion of remote work. … And if they have the option to, instead of buying a house in Los Angeles, they can get it at a lower-cost city in some other part of the country. That's a great thing for those people,” Baker says. “And it's also a good thing for the market in LA because it means a lot of people that otherwise would have been taking up a lot of space in LA, they're elsewhere.”