Why the economy is so hard to figure out right now

Illustration: Aïda Amer/Axios

The job market is strong. Layoffs are happening. Businesses are pessimistic. Consumers are still spending.

• If you're having a hard time figuring out this economy, you're not alone — it's sending all sorts of mixed signals.

Why it matters: The inflation crisis — namely record gas prices — has plunged consumer sentiment to an all-time low.

• Meanwhile, the Fed's bid to wrest control of price spikes by imposing interest-rate hikes is having far-reaching effects.

The big picture: Depending on where you focus your attention, the economy can look nowhere near as bad as some people say — or that we're heading for a total face-plant:

• The unemployment rate is only about a point away from an all-time low, but companies like Redfin, Netflix and Coinbase are cutting workers.
• Business optimism hit the lowest point in the 12 years of JPMorgan Chase’s Business Leaders Outlook Pulse survey, released today. But durable goods orders rose 0.7% in May, according to figures released today, signaling that companies were still spending.
• Mortgage rates are pricing many buyers out of the housing market — but median home price growth held steady for a third straight week last week.

Reality check: The pandemic triggered a period of profound economic disruption, leaving some of the economic tea leaves harder to read than in past cycles.

• Much of what seems today like conflicting or inconsistent data could simply be the result of an economy on the brink of change.

What they're saying: "As people learned to live with COVID-19 and prove resilient so far to higher prices at the checkout stand, economic momentum will likely protect the U.S economy this year," S&P Global Ratings U.S. chief economist Beth Ann Bovino said Monday in a statement. "What's around the bend in 2023 is the bigger worry."

The bottom line: Uncertainty is toxic for investor and consumer sentiment.

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