WASHINGTON, DC — The U.S. Labor Department’s unemployment report reveals job growth in August stayed strong yet showed signs of slowing under the pressure of the highest interest rates in 22 years. While the Fed’s ill-advised strategy of raising interest rates an unprecedented 11 times in 16 months has already taken a toll on consumer demand, Federal Reserve Chairman Jerome Powell announced last week the Fed is “prepared to raise rates further if appropriate.” Powell made no acknowledgement of the dire warnings from a chorus of lawmakers, academics, and economists that the economy could tip towards a recession if the rate hikes continue.
Today’s positive economic news could be fleeting if the Fed chooses to push interest rates to the breaking point and American workers into a needless recession. Every time the Fed doubles down on its interest rate hikes, they gamble with millions of peoples’ jobs while profiteering corporations shrug it off and go about business as usual,” said Jeremy Funk, spokesman for Accountable.US.
“A recession is not inevitable, but the Fed has done the economy no favors. Making it even more expensive for Americans to borrow money to buy new homes and cars will only drive demand down, seriously jeopardizing the economic gains made under the Biden Administration. Doing no harm is the most responsible course of action for the Fed. That means pausing rate hikes for the foreseeable future and letting Congress use the power it has to deal with the corporate greed epidemic,” added Funk.
FED’S INTEREST RATE HIKE SPREE HURTING ECONOMY AND FAMILIES WHILE DOING NOTHING ABOUT GREEDFLATION:
- Most Americans Hurt by High Rates: CNBC, 7/21: “Most Americans said rising interest rates have hurt their finances in the last year. About 77% said they’ve been directly affected by the Fed’s moves, according to a report by WalletHub. Roughly 61% said they have taken a financial hit over this time, a separate report from Allianz Life found, while only 38% said they have benefited from higher interest rates.”
- Fed rate hike hurt economy over long-term: USA Today, 8/28: “Broadly, a percentage point increase in interest rates could reduce economic output by 1% up to nine years later, the authors say. Since the Fed has raised its key interest rate by 5.25 percentage points since March 2022, that suggests the campaign could lead to a 5% reduction in output in coming years.”
- Greedflation is not letting up: MarketWatch, 8/3: “The second-quarter earnings season so far is showing that one trend that featured in the first quarter has not gone away. ‘Greedflation,’ or the practice of companies raising prices to protect their profit margins, is alive and well, based on the number of companies that have so far acknowledged raising prices yet again, even as inflation readings have come down and as some acknowledge that their input costs are falling. At the same time, companies continue to emphasize on earnings calls that their customers are showing signs they are weary of higher prices and are shopping more frequently at more stores, while spending less per trip.”