Recent macroeconomic data may suggest a disappointing outlook at first glance, but in reality, they indicate the underlying strengths of the US economy. Despite ongoing challenges such as inflation and the lingering effects of the pandemic on consumer behavior, aggregate consumption levels remain more than $1.5 trillion above 2019 levels in real terms.
While this robust consumption presents challenges for some firms and households, it is a positive sign for the economy as a whole. However, businesses must navigate high interest rates carefully to avoid existential threats to their existence. In this environment of economic tightness, executives need to resist reacting to every fluctuation in volatile data and instead adjust their mental models with a clear understanding of the current economic landscape.
By recognizing the underlying strengths of the economy and positioning themselves to succeed amidst high consumption and interest rates, businesses can set themselves up for long-term success.
