CoBank Quarterly: Inflation is Beginning to Loosen its Grip

The U.S. economy will progressively slow through the first half of 2023 and fears of a recession are still high, and still warranted. Inflation and interest rate increases intended to combat swiftly rising prices are behind the broad economic slow- down. But with the unemployment rate at a 53-year low and inflation trending lower, forecasts are turning at least a little less gloomy.

U.S. consumers are still spending but doing so by increasing dependence on credit. They are also finally pushing back on price increases on goods, a response to continuous declines in real wages and dwindling reserves of pandemic savings. Like consumers, businesses economy-wide are also spending more cautiously, according to a new quarterly report from CoBank’s Knowledge Exchange.