MainStreet Macro

As we welcome 2023, the global economy is in a precarious place, with the growth outlook likely to slow for a second straight year in 2023. In addition to global growth, there are other trends that could be as important, if not more important, to the economy this year and in years ahead. As you plan for the new year, keep in mind these five global growth trends that are reshaping the world of work.

As we round out 2022, one of the most frequent questions I get is, “Are we heading toward a recession?” Economic downturns are notoriously hard to call in real time. In fact, recessions aren’t officially designated until several months after the economy has moved out of one.

The labor market has had an incredible run in 2022. But with the Federal Reserve continuing to hike interest rates and companies announcing layoffs and hiring freezes, we might ask if that winning streak is coming to an end.

Before the holiday break, I left MainStreet Macro readers with a bit of a cliffhanger. We had just heard about layoffs at some of the biggest technology companies, a sector that has seen a lot of growth over the past several years.

Last week, while I was waiting with bated breath for the October inflation report, the headlines were buzzing with a series of announcements that seemed to bode poorly for the economy. Tech companies had muscled into the news cycle, announcing massive layoffs and hiring freezes. The cuts were dramatic and part of a running trend: The sector has shed nearly 120,000 jobs globally so far this year, and more than 23,000 in November alone, according to one layoff tracker.

Last week brought fresh job data from the ADP Research Institute and the Bureau of Labor Statistics, and another rate hike from the Federal Reserve. Football season is in full swing, too, so here’s some color analysis of the game we’re all watching: Team Fed v. Team Inflation.

When was the last time you took a walk down a real Main Street, the commercial hub of any small town or city? I recently had a chance to do just that with Kai Ryssdal, host of the “Marketplace” broadcast on American Public Media. Kai and I took a tour of Elmwood Avenue, a happening strip of local businesses in central Buffalo. Why Buffalo? Kai is a New York Giants fan, so it had nothing to do with the Bills’ near-flawless season. No, we headed to Buffalo because ADP Research Institute data recently showed that wages for lower-paid workers in the city had skyrocketed, jumping 40 percent from 2019 to 2021. Last year, for the first time, low-end salaries grew more rapidly in America’s most affordable cities than anywhere else.

The application process has begun! No, not for college admission, for student loan forgiveness. Last week, the Biden administration opened the application process debt forgiveness, the first step in the president’s three-part plan to help low- to middle-income borrowers saddled with big tuition bills. There are no transcripts, standardized test scores, essays, or letters of recommendation required. Applicants for this program need to meet only one threshold: Debt holders must earn less than $125,000 a year in individual income or $250,000 in household income to be eligible. The payoff: up to $10,000 in debt forgiveness, or, for recipients of federal Pell Grants, which are distributed to students with financial need, up to $20,000.