WASHINGTON (AP) – Signs asking for help are everywhere. Employers post nearly two jobs for every unemployed American. Hiring is on track for the second-strongest year in state records dating back to 1940. And the economy grew steadily over the summer. From some angles, the nation’s economic picture looks healthy. But the scene is bombarded by an unsightly invader: Chronically high inflation. Rising prices are straining family budgets and causing hardship for the most economically disadvantaged households. In addition, the Federal Reserve’s attempt to tame inflation through much higher interest rates raises the risk of a recession by next year. With voting underway in the midterm congressional elections that culminate next week, many Americans are downbeat about the outlook for the economy and their own finances — encouraging news for Republicans hoping to regain control of Congress and ominous news for President Joe Biden’s congressional Democrats. A poll conducted in early October by the Associated Press-NORC Center for Public Affairs Research found that 46 percent of people felt their personal finances were poor, up from 37 percent who said so in March.

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America’s economy is in shambles 2 ½ years after COVID-19 turned business as usual. The brief but deep recession that erupted in the spring of 2020 was quickly followed by an explosive recovery that overwhelmed global supply chains, causing shortages of goods and labor and fueling price pressures that have yet to subside. What remains is an unusual combination of crushing inflation and a strong labor market. “The data,” said economist Megan Green of the Kroll Institute, “is all over the map.” Many workers have received decent pay rises from employers desperate to attract and retain staff. But higher prices wipe out those wage gains. Adjusted for inflation, hourly wages fell 3% in September from a year earlier — the 18th straight monthly decline. “Wage growth has not kept pace,” Greene said. “It’s great that people have jobs. But their standard of living is reduced by inflation.” Here’s a closer look at the vital signs of the economy, which are sending mixed messages to policymakers, businesses, forecasters — and voters: Perhaps no economic barometer has been as frightening as gross domestic product — the economy’s total output of goods and services. After rising 5.9% last year, the best point since 1984, GDP fell into a funk in the first half of this year. It shrank at an annual rate of 1.6% from January to March and then by 0.6% from April to June. The economic contraction of the first half was caused by factors that did not really reveal much about the health of the underlying economy. The decline was driven by falling corporate inventories, a cyclical development that often reverses soon after, and rising imports, which reflected Americans’ strong appetite for foreign goods. Last week, the government reported that GDP returned to growth in the July-September quarter, at a steady annual rate of 2.6%. However, the new image wasn’t entirely cause for celebration. Consumer spending, which accounts for about 70 percent of U.S. economic activity, weakened last quarter: It rose at an annual rate of just 1.4 percent, down from 2 percent in the April-June period. All of GDP growth in the third quarter could be attributed to a jump in exports and lower imports, which together added nearly 2.8 percentage points of growth. This performance is not likely to be repeated. A stronger dollar has made American goods more expensive abroad. And Russia’s war against Ukraine has helped weaken the global economy and reduce demand for US goods. “If you look under the hood at these third-quarter figures,” Greene said, “it suggests that it hasn’t been as strong, and we can’t expect that to continue.” The economic outlook is also bleak as the Fed steadily raises interest rates. Since March, the central bank has raised the benchmark interest rate five times, including three consecutive strong three-quarter hikes. He is expected to do so again on Wednesday and in December. Fed policymakers are aiming for a “soft landing” — raising interest rates enough to slow growth and bring inflation toward the 2 percent annual target, without triggering a recession in the process. Most economists, however, doubt it can be done. They predict a recession starting sometime in 2023. One reason for widespread skepticism about the Fed’s ability to sustain a soft landing is that inflation is proving harder to beat than policymakers expected. The result is that more and larger rate hikes will likely be required than originally anticipated. In September, the government’s consumer price index rose a higher-than-expected 0.4% from August and 8.2% from a year earlier. Worse, so-called core inflation, which strips out volatile food and energy costs to better assess price pressures, rose 6.6 percent from a year earlier. This was the biggest such jump in 40 years. Moreover, high inflation is hardly confined to the United States. In the 19 countries that share the euro currency, for example, prices rose by 9.9% in September compared to a year earlier. Russia’s invasion of Ukraine has driven up energy prices and disrupted food supplies. In the United States, inflation has not only remained high, but has expanded from the goods sector of the economy to the much larger services sector – a vast area that includes everything from airline tickets, car insurance and medical care to hotel prices, apartment rents and restaurant meals. The problem is that the greater the difference in inflation, the harder it is to control. The labor market is the clear star of the American economy. Employers have ignored rising prices, rising interest rates and fears of an impending recession and have simply continued to hire. After adding a record 6.7 million jobs last year, the economy has posted a strong monthly average of 420,000 jobs so far this year. The unemployment rate in September, 3.5%, corresponds to a half-century low. However, the labor market is cooling. Job gains slowed for two straight months — to 263,000 in September from 315,000 in August and 537,000 in July. Employers posted 10.7 million jobs in October, the government said on Tuesday. That was up from 10.3 million, though down from a peak of 11.9 million in March. By historical standards, these figures were unusually high: For 15 straight months, openings exceeded 10 million, a level never reached before 2021. Americans also enjoy excellent job security. Employers are laying off an average of just under 1.4 million workers monthly — on pace to surpass last year for the fewest layoffs in government records dating back to 2001. The labor market, however, is expected to worsen as interest rate hikes in Fed are starting to bite. American consumers, the lifeblood of the economy, have proven resilient through the ups and downs of the COVID economy. Their spending both led to a strong recovery and fueled inflationary pressures. Although higher prices have sapped their spending power and the 2020 and 2021 federal aid checks are long gone, Americans have continued to spend, albeit at a subdued pace. Consumer spending rose 0.3 percent from August to September, even after adjusting for inflation, the government said. It is not certain that consumers can sustain it. They’ve collectively used up much of the savings they built up during the pandemic, though their finances are still relatively strong and they’re increasingly turning to credit cards. The US savings rate fell. “It’s clear the economy is slowing,” Kroll’s Greene said. “The question is how fast. And the other question is, at what point do businesses and consumers feel they have to cut back? And this is more a matter of psychology than economics.” For now, businesses and consumers have enough cash to keep spending. They do not need to reduce immediately: “But they might do it anyway because there’s all this talk of a recession coming and given that there’s so much uncertainty in the economy.” The Fed’s rate hikes have already taken a toll: America’s housing market is reeling under the pressure of sharply higher mortgage rates. The average interest rate on a 30-year fixed mortgage, which was just 3.14% a year ago, topped 7% last week for the first time since 2002. Sales of existing homes have fallen for eight straight months. The GDP report showed that housing investment fell at an annual rate of 26% from July to September. And housing construction in September fell 8% from a year earlier. Home prices continue to rise, supported by a limited number of homes on the market. But price increases are slowing. The S&P CoreLogic Case-Shiller index of home prices in 20 U.S. cities rose 13% in August from a year earlier. However, that marked a slowdown from a 16% annual gain in July. As higher mortgage rates continue to derail home sales, Oxford Economics predicts, “the housing news will only get worse from here.” America’s factories continue to expand. But the outlook is dim. A manufacturing index released on Tuesday by the Institute for Supply Management, an organization of purchasing managers, showed that factories have been expanding for 29 straight months. However, the index fell in October to its lowest level since May 2020, when the economy was still struggling under the weight of forced business shutdowns due to COVID. New orders, new export orders and recruitment of all contracts. Similarly, the government reported last week that orders for durable industrial goods (excluding the volatile transportation sector) fell 0.5 percent in September. That report “doesn’t bode well,” wrote Cathy Bostancic, chief U.S. economist at Oxford Economics. Factory-made products will likely be weakened by the higher dollar and…