The U.S. economy has been dealing with a shortage of goods and high gas prices during the past year, leading to inflation and higher prices for goods and services.
It’s also triggered worries of an impending recession.
University of Michigan economics and public policy professor Justin Wolfers believes the inflation situation is improving.
Listen: University of Michigan professor says U.S. economy will improve in near future
“Inflation was distressing. Right now, it may still be a little distressing,” Wolfers says. “The future looks like it’s going to be a whole lot less distressing.”
The U.S. economy added nearly 500,000 jobs over the final two months of 2022, but in recent weeks tech companies and Amazon have shed tens of thousands of workers as they back down from a pandemic-related hiring frenzy. Still, Wolfers isn’t overly concerned.
“Inflation has been coming down without unemployment rising, and so the economy may well be on a glide path to a soft landing.”
If there is a recession, Wolfers is pretty optimistic.
“If we were to fall into recession, there’s no indication it would be a severe recession,” says Wolfers. “I talk to my students, and they say, ‘Hey, man, what’s up? During my lifetime, we’ve endured two once-in-a-century economic collapses. The first due to the global financial crisis, and the second due to the pandemic. Is another once-in-a-century sort of recession coming around the corner?’ If so, hopefully, it’ll be relatively mild, and the economy will resume its momentum pretty soon.”