Business

Top 5 misconceptions about the economy in 2023 on December 28, 2023 at 11:15 am Business News | The Hill

Published

2 years ago

December 28, 2023

2023 was a year in which many experts got a lot of things wrong about the economy.

From mistaken forecasts about an impending recession to errors about falling prices and why they had risen in the first place, 2023 was a year marked by economic confusion.

Even the Federal Reserve got disoriented, predicting an economic downturn at the beginning of the year and then yanking that prediction over the summer.

This waffling peeved some major players in the financial industry, including JPMorgan Chase CEO Jamie Dimon, who called the Fed out for providing unreliable guidance and being “100 percent dead wrong.”

“Central banks 18 months ago were 100 percent dead wrong. Maybe there should be humility about financial forecasting,” he said during a panel event in Saudi Arabia in October.

Here’s a look back at some of the biggest misconceptions about the economy of 2023.

Rising interest rates are sure to cause a recession

There was virtual certainty among economists at the end of last year that 2023 would see a recession. The debate was whether that recession would be short-lived and relatively superficial or long and serious, entailing a major spike in unemployment.

“The recession we have now been anticipating for nine months draws nearer,” Deutsche Bank analysts Peter Hooper and David Folkerts-Landau wrote in November of last year. “Our expectation for a recession in the US by mid-2023 has strengthened.”

That incorrect forecasting was based on the assumption that rising interest rates would directly slow the economy, tanking markets and causing workers to be fired.

“The economic downturns along with the aggressive monetary tightening and geopolitical and commodity shocks that induce them will be temporarily painful in financial and emerging markets. We see major stock markets plunging 25 percent from levels somewhat above today’s when the US recession hits, but then recovering fully by year-end 2023, assuming the recession lasts only several quarters,” Folkerts-Landau and Hooper wrote.

But the Fed’s program of tightening led neither to mass unemployment nor to a stock market dive. On the contrary, gross domestic product surged to a 4.9-percent quarterly increase during the third quarter.

The most the Dow Jones Industrial Average of major US stocks lost from its November 2022, level was about 7 percent in March of this year. The Dow has since risen 9.5 percent above that level, setting several new records this month, and unemployment has remained below 4 percent.

Unemployment needs to go up for inflation to go down

Economists have long correlated inflation and unemployment in part because employment costs are the major portion of overhead paid by companies. In the third quarter of this year, employee compensation was about 58 percent of real prices, input costs were about 26 percent, and profits were about 16 percent.

To stop rising prices, many economists believed the Fed needed to put the squeeze on workers’ paychecks with higher interest rates and then watch consumer demand and overhead costs fall and prices along with them. Or so the conventional thinking went.

“Persistent levels of inflation suggest the need for reduced economic activity to cool inflation to 2 percent … This would spark job losses, which we do expect to see based on the Fed’s forecasts,” Michael Weisz, president of investment firm Yieldstreet, wrote in an analysis at the end of last year.

But 2023 unbuckled the correlation between unemployment and inflation.

Headline inflation as measured in the consumer price index (CPI) fell from a 6.3-percent annual increase in January off a high last year of nearly 9 percent to just 3.1 percent in November.

The personal consumption expenditures (PCE) price index, a different measure of inflation preferred by the Fed, fell from a 5.5-percent annual increase in January to just 2.6 percent in November – close to the the Fed’s 2-percent target.

The sharp drop in inflation came as the jobless rate barely moved.. Since inflation hit its 9-percent peak last June, unemployment has stayed between 3.4 and 3.9 percent — a far cry from the ranges of 6, 7 and even 10 percent predicted last summer.

Wages aren’t rising for the lowest-paid workers

Amid so much concern over the magnitude and trajectory of inflation, average hourly earnings for all US workers have actually kept pace with rising prices since the pandemic started in March 2020.

In fact, earnings have risen 19.4 percent since February 2020, slightly outpacing the increase in the CPI of 18.8 percent over the same period. Lower-wage workers have seen a greater share of these gains, contributing to a shrinking of income inequality in the US.

For production and nonsupervisory workers, who account for the majority of the U.S. workforce, their wages have increased 21.9 percent since just before the pandemic, more than 3 percentage points higher than the increase in the CPI.

Hospitality and leisure industry staff, who are some of the lowest paid people in the economy, have seen their wages rise 27 percent over the same period.

“The pandemic … [reduced] employer market power and [spurred] rapid relative wage growth among young noncollege workers who disproportionately moved from lower-paying to higher-paying and potentially more-productive jobs,” researchers from the Massachusetts Institute of Technology and the University of Massachusetts Amherst found earlier this year.

Rising markets, low unemployment will make people feel good

Despite solid economic performance data and a lot of salesmanship from the Biden administration, Americans have still been gloomy about the economy — a disconnect lamented and puzzled over by many financial commentators.

A December poll from Bankrate found that most Americans think the economy is currently experiencing a downturn, majorities those earning under $50,000 annually and those making more than $100,000 a year saying they feel like the U.S. economy is in a recession.

This gloom has translated into poor public opinion polling for President Biden. A November poll from Gallup found that just 32 percent of Americans approved of his handling of the economy.

But sentiment could be turning around in a major way. The latest Michigan Survey of Consumer Sentiment found a major brightening of the economic mood across various categories, reversing a fourth-month downward trend.

“These trends are rooted in substantial improvements in how consumers view the trajectory of inflation,” University of Michigan pollsters wrote. “All five index components rose this month, which has only occurred in 10 percent of readings since 1978. Expected business conditions surged over 25 percent for both the short and long run.”

Inflation had a single, clear-cut origin

Democrats and liberal economists have argued that inflation during the past year was caused primarily by supply-side disruptions while Republicans and conservative economists have blamed inflation on higher demand, boosted by trillions of dollars in pandemic stimulus.

Other economists have said the blame should fall mostly with corporations who took the opportunity of consumers’ being flush with cash to raise their prices and boost their profit margins.

The Ukraine war’s effect on energy prices and further variants of the coronavirus that extended the pandemic in 2021 were also fingered as culprits.

In fact, all of these factors contributed to varying degrees to the inflation that took off internationally starting in 2021 and lasted into this year. Holding up any single cause as the lone perpetrator ignores the dynamics between governments and the private sector that underlie the economy and international price system.

“Inflation eases at different rates across countries, due to their economic structures,” United Nations economists wrote in their 2023 trade and development report.

“As the cost of key inputs accelerates, several circumstances allow firms to gain higher profits by setting their prices following the general increasing trend, even if the goods were produced when inputs were cheaper,” they wrote. “Monetary policy is not to be used as a sole policy tool to alleviate inflationary pressures. With supply-side problems still unaddressed, a policy mix is needed to attain financial sustainability.”

Business, Economy, News, federal reserve, Federal reserve rate hikes, inflation, Interest rates, prices, Recession, Stock Market, unemployment, Wages 2023 was a year in which many experts got a lot of things wrong about the economy. From mistaken forecasts about an impending recession to errors about falling prices and why they had risen in the first place, 2023 was a year marked by economic confusion. Even the Federal Reserve got disoriented, predicting an economic…

Business

How Trump’s Tariffs Could Hit American Wallets

Published

1 day ago

July 11, 2025

Bolanle Media Staff

As the debate over tariffs heats up ahead of the 2024 election, new analysis reveals that American consumers could face significant financial consequences if former President Donald Trump’s proposed tariffs are enacted and maintained. According to a recent report highlighted by Forbes, the impact could be felt across households, businesses, and the broader U.S. economy.

The Household Cost: Up to $2,400 More Per Year

Research from Yale University’s Budget Lab, cited by Forbes, estimates that the average U.S. household could pay an additional $2,400 in 2025 if the new tariffs take effect and persist. This projection reflects the cumulative impact of all tariffs announced in Trump’s plan.

Price Hikes Across Everyday Goods

The tariffs are expected to drive up consumer prices by 1.8% in the near term. Some of the hardest-hit categories include:

Apparel: Prices could jump 37% in the short term (and 18% long-term).
Footwear: Up 39% short-term (18% long-term).
Metals: Up 43%.
Leather products: Up 39%.
Electrical equipment: Up 26%.
Motor vehicles, electronics, rubber, and plastic products: Up 11–18%.
Groceries: Items like vegetables, fruits, and nuts could rise up to 6%, with additional increases for coffee and orange juice due to specific tariffs on Brazilian imports.

A Historic Tariff Rate and Economic Impact

If fully implemented, the effective tariff rate on U.S. consumers could reach 18%, the highest level since 1934. The broader economic consequences are also notable:

GDP Reduction: The tariffs could reduce U.S. GDP by 0.4% annually, equating to about $110 billion per year.
Revenue vs. Losses: While tariffs are projected to generate $2.2 trillion in revenue over the next decade, this would be offset by $418 billion in negative economic impacts.

How Businesses Are Responding

A KPMG survey cited in the report found that 83% of business leaders expect to raise prices within six months of tariff implementation. More than half say their profit margins are already under pressure, suggesting that consumers will likely bear the brunt of these increased costs.

What This Means for Americans

The findings underscore the potential for substantial financial strain on American families and businesses if Trump’s proposed tariffs are enacted. With consumer prices set to rise and economic growth projected to slow, the debate over tariffs is likely to remain front and center in the months ahead.

For more in-depth economic analysis and updates, stay tuned to Bolanlemedia.com.

Business

U.S. Limits Nigerian Non-Immigrant Visas to Three-Month Validity

Published

3 days ago

July 9, 2025

Bolanle Media Staff

In July 2025, the United States implemented significant changes to its visa policy for Nigerian citizens, restricting most non-immigrant and non-diplomatic visas to a single entry and a maximum validity of three months. This marks a departure from previous policies that allowed for multiple entries and longer stays, and has important implications for travel, business, and diplomatic relations between the two countries.

Key Changes in U.S. Visa Policy for Nigerians

Single-Entry, Three-Month Limit: As of July 8, 2025, most non-immigrant visas issued to Nigerians are now valid for only one entry and up to three months.
No Retroactive Impact: Visas issued prior to this date remain valid under their original terms.
Reciprocity Principle: The U.S. cited alignment with Nigeria’s own visa policies for U.S. citizens as the basis for these changes.
Enhanced Security Screening: Applicants are required to make their social media accounts public for vetting, and are subject to increased scrutiny for any signs of hostility toward U.S. institutions.

Rationale Behind the Policy Shift

Security and Immigration Integrity: The U.S. government stated the changes are intended to safeguard the immigration system and meet global security standards.
Diplomatic Reciprocity: These restrictions mirror the limitations Nigeria imposes on U.S. travelers, emphasizing the principle of fairness in international visa agreements.
Potential for Further Action: The U.S. has indicated that additional travel restrictions could be introduced if Nigeria does not address certain diplomatic and security concerns.

Nigeria’s Updated Visa Policy

Nigeria Visa Policy 2025 (NVP 2025): Introduced in May 2025, this policy features a new e-Visa system for short visits and reorganizes visa categories:
- Short Visit Visas (e-Visa): For business or tourism, valid up to three months, non-renewable, processed digitally within 48 hours.
- Temporary Residence Visas: For employment or study, valid up to two years.
- Permanent Residence Visas: For investors, retirees, and highly skilled individuals.
Visa Exemptions: ECOWAS citizens and certain diplomatic passport holders remain exempt.
Reciprocal Restrictions: Most short-stay and business visas for U.S. citizens are single-entry and short-term, reflecting reciprocal treatment.

Impact on Travelers and Bilateral Relations

Nigerian Travelers: Face increased administrative requirements, higher costs, and reduced travel flexibility to the U.S.
U.S. Travelers to Nigeria: Encounter similar restrictions, with most visas limited to single entry and short duration.
Diplomatic Tensions: Nigerian officials have called for reconsideration of the U.S. policy, warning of negative effects on bilateral ties and people-to-people exchanges.

Conclusion

The U.S. decision to limit Nigerian non-immigrant visas to three months highlights the growing complexity and reciprocity in global visa regimes. Both countries are tightening their policies, citing security and fairness, which underscores the need for travelers and businesses to stay informed and adapt to evolving requirements.

Business

Nicki Minaj Demands $200 Million from Jay-Z in Explosive Twitter Rant

Published

3 days ago

July 9, 2025

Bolanle Media Staff

Nicki Minaj has once again set social media ablaze, this time targeting Jay-Z with a series of pointed tweets that allege he owes her an eye-popping $200 million. The outburst has reignited debates about artist compensation, industry transparency, and the ongoing power struggles within hip-hop’s elite circles.

The $200 Million Claim

In a string of tweets, Minaj directly addressed Jay-Z, writing, “Jay-Z, call me to settle the karmic debt. It’s only collecting more interest. You still in my top five though. Let’s get it.” She went further, warning, “Anyone still calling him Hov will answer to God for the blasphemy.” According to Minaj, the alleged debt stems from Jay-Z’s sale of Tidal, the music streaming platform he launched in 2015 with a group of high-profile artists—including Minaj herself, J. Cole, and Rihanna.

When Jay-Z sold Tidal in 2021, Minaj claims she was only offered $1 million, a figure she says falls dramatically short of what she believes she is owed based on her ownership stake and contributions. She has long voiced dissatisfaction with the payout, but this is the most public—and dramatic—demand to date.

Beyond the Money: Broader Grievances

Minaj’s Twitter storm wasn’t limited to financial complaints. She also:

Promised to start a college fund for her fans if she receives the money she claims is owed.
Accused blogs and online creators of ignoring her side of the story, especially when it involves Jay-Z.
Warned content creators about posting “hate or lies,” saying, “They won’t cover your legal fees… I hope it’s worth losing everything including your account.”

She expressed frustration that mainstream blogs and platforms don’t fully cover her statements, especially when they involve Jay-Z, and suggested that much of the coverage she receives is from less reputable sources.

Satirical Accusations and Industry Critique

Minaj’s tweets took a satirical turn as she jokingly blamed Jay-Z for a laundry list of cultural grievances, including:

The state of hip-hop, football, basketball, and touring
The decline of Instagram and Twitter
Even processed foods and artificial dyes in candy

She repeatedly declared, “The jig is up,” but clarified that her statements were “alleged and for entertainment purposes only.”

Political and Cultural Criticism

Minaj also criticized Jay-Z’s political involvement, questioning why he didn’t campaign more actively for Kamala Harris or respond to President Obama’s comments about Black men. While Jay-Z has a history of supporting Democratic campaigns, Minaj’s critique centered on more recent events and what she perceives as a lack of advocacy for the Black community.

The Super Bowl and Lil Wayne

Adding another layer to her grievances, Minaj voiced disappointment that Lil Wayne was not chosen to perform at the Super Bowl in New Orleans, a decision she attributes to Jay-Z’s influence in the entertainment industry.

Public and Industry Reaction

Despite the seriousness of her financial claim, many observers note that if Minaj truly believed Jay-Z owed her $200 million, legal action—not social media—would likely follow. As of now, there is no public record of a lawsuit or formal complaint.

Some fans and commentators see Minaj’s outburst as part of a larger pattern of airing industry grievances online, while others interpret it as a mix of personal frustration and performance art. Minaj herself emphasized that her tweets were “for entertainment purposes only.”

Conclusion

Nicki Minaj’s explosive Twitter rant against Jay-Z has once again placed the spotlight on issues of artist compensation and industry dynamics. Whether her claims will lead to further action or remain another dramatic chapter in hip-hop’s ongoing soap opera remains to be seen, but for now, the world is watching—and tweeting.