By: Vilhelm Vast of King University
"The faith that anyone could move from rags to riches – with enough guts, and gumption, hard work, and nose to the grindstone – was once at the core of the American Dream.” –Robert Reich, economist, and former U.S. Secretary of Labor
After the industrial revolution, and revenue was being accrued by debts from Germany after World War 2; the idea of an American dream became a reality. New money, and infrastructure were being developed while innovation brought advances in technology. The idea of an American dream was to establish a stable family with the ability to generate wealth by legacy. As of 2022, has this idea been lost? According to the Federal Open Market Committee report inflation for 2023 will decrease to 2.8, but the International Monetary Fund said it will decrease to 3.5. The many unknown variables have many economists saying that the inflation outlook for the coming years are uncertain. A report by Keerthi Vedantam of Crunch Base News Media Network revealed that this November the technology sector has laid off over 85,000 employees. This is the time, and season that most companies hire temporary employees, but companies like Meta are saying they have too many employees from recruiting during the Covid-19 emergency. But Nicole Bowman of the Incfile Company has noted that at least 60% of upcoming entrepreneurs are planning on starting a new business. A new start up called BrainPod AI that involves integrating artificial intelligence with a business model, and a fashion company Mauricio Emanuelle Noble; their model is to change the trend of fashion into elegance, and conservative class. But with so many consumers shopping on credit cards with an interest rate of about 19 percent will new start up companies be able to survive in the long term? Steve Forbes predicts after the extreme credit card spending during the holidays; fiscal quarter 1 of 2023 will be damaging to the economy. It will be harder to afford a business loan as the federal funds rate is constantly increased by the federal reserve. According to Goldman Sachs their outlook for the first quarter of 2023 is 5 to 5.25 percent. As the country enters a new year many companies prepare for a recession. The Pepsi Company plans to layoff hundreds of corporate positions. As many states raise their minimum wage next year; more employees may be laid off. According to the Thrive My Way Company, there are over 4.5 million people that have started online businesses since the start of the pandemic. Josh Howarth of Exploding Topics media reported that new start up businesses fail at a rate of 90%.
Less buying power with the dollar equals slow growth for the economy next year, and as the economy contracts businesses will begin to layoff more workers up to 3 million employees. - Beth Ann Bovino Chief Economist, US/Canada at S&P Global
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