The Fed has decided the US will need a 'growth recession' to rein in inflation. Here's why it's bad news for job seekers.

market insider ^ | 9/7/2022 | Ben Winck,Madison Hoff

[RomanSoldier19]

The chance of an economic "soft landing" has faded, and the Fed is pushing for a "growth recession."

The phrase describes a period of below-average growth, rising unemployment, and slowing inflation.

The Fed chair said that while it'd "bring some pain," letting inflation stay high would be worse.

In an ideal world, the Federal Reserve has already vanquished pandemic-era inflation while keeping unemployment at historic lows and avoiding a recession.

Hopes for such an outcome are all but entirely dashed, and the Fed has switched to plan B.

The central bank's message at its annual conference in Jackson Hole, Wyoming, this year was a simple and stark one. In remarks on August 26 that lasted less than 10 minutes, Jerome Powell, the Fed's chair, warned that cooling inflation would "bring some pain" to Americans through layoffs, weaker pay growth, and higher borrowing costs. He said that while the side effects are "unfortunate," a failure to slow price growth and normalize the economy "would mean far greater pain."

[Keyhopper]

Build backward better????

[Karoo]

I was wondering this morning when would the government let off their employees and how many.

[clearcarbon]

"The Fed has decided the US will need a 'growth recession' to rein in inflation. Here's why it's bad news for job seekers."

Sure hoped I'd never come around to thinking of Jimmy Carter as the good ol' days!

[ConservativeInPA]

I was wondering this morning when would the government let off their employees and how many.

Not any time soon. Republicans need to control Congress. Once that occurs, Republicans need to get a backbone. They have a couple options once in control. The first is to not increase the debt limit. That, in turn, will require appropriations to be cut to match decreased tax revenue from an economy in recession. Concurrently, the cost of everything will be higher due to inflation. Something will have to be cut. Republicans cannot raise taxes to temporarily increase revenue. That would be disastrous to the economy. I doubt Republicans can pass any bills that shutter portions of government. The only way that can occur is if they have a veto proof majority. Real cuts in government will have to wait for a Republican president.

Democrats heads will explode and act as the world will end if any lazy ass government employee is ever laid off. Be prepared for that.