The Sconi

President Joe Biden said in a tweet that he believes 2023 will be a "great year," because parts of the Inflation Reduction Act are going into effect. However, the high rate of inflation over the last year resulted in trillions of dollars in lost wealth for American households, and many are struggling to keep up with high costs of living. Some economists are predicting a nationwide recession in 2023, and a majority of business owners surveyed by Wisconsin Manufacturers and Commerce predict a recession.

“I think it’s going to be a great year,” Biden said in a recent tweet. “Why? Because we get to start implementing a lot of the things we passed last year. ...You'll see tons of good-paying manufacturing and construction jobs open. We’re just getting started. Here’s to 2023, and the work we’re going to do together."

The U.S. Bureau of Labor Statistics issued the latest Consumer Price Index (CPI) summary on Dec. 13, which found that the rate of inflation over the last 12 months stood at 7.1%. Over the last year, the cost of food increased by 10.6%, the cost of energy increased by 13.1%, the cost of fuel oil rose by 65.7%, the cost of new vehicles rose by 7.2%, the cost of shelter increased by 7.1% and the cost of transportation services increased by 14.2%.

According to CNBC, inflation hit a record high of 9.1% in June, representing the largest 12-month inflation rate the country has seen since 1981, but wage growth failed to keep up with inflation. While some Americans did see wage increases last year, wage growth was proportional to an inflation rate of approximately 4.5%. Two-thirds of American employees said their income has not kept up with higher costs of rent, groceries and gas, the network reported.

According to Fedsmith.com, a December report found that during the first three quarters of 2022, Americans' wealth in investments, bank accounts and property values decreased by approximately $6.8 trillion.

Many economists predict that the U.S. will experience a recession in 2023, Vox reported. Many Americans, especially those in lower-income households, have dipped into their savings to keep up with the skyrocketing costs of food and rent.

"Our view is that employment growth will continue to slow and eventually there will be outright job losses," said Kathy Bostjancic, Nationwide's chief economist. “That will have a material impact on consumer spending, and that’ll be a big part of why we fall into recession. It’s really been the labor market and the consumer that has kept the economy buoyant, but once that turns, then the overall economy will as well. It’s possible that inflation proves to be even more stubborn and elevated than expected, which could lead the Fed to raise interest rates even more, which could result in a major recession.”

A survey of more than 200 Wisconsin business owners conducted by Wisconsin Manufacturers and Commerce in July found that 71% of respondents predicted a recession in the next year, Urban Milwaukee reported. Almost two-thirds of respondents said the costs to operate their businesses have risen by more than 10% in the last year, and only 45% said they expect Wisconsin's economy to grow in the next year.

“Wisconsin businesses are going to be much more cautious over the next six months to a year as they’re seeing all of these signs pointing to a slowing economy,” Nick Novak, Wisconsin Manufacturers and Commerce spokesperson, said. “I think that they are going to continue to try and hire as they need. But we may see hiring slow just a little bit, at least through the end of 2022, and it may slow even more in 2023, according to the Wisconsin Employers Survey.”

Rep. Bryan Steil (WI-01) pointed to high government spending as the cause of inflation.

"As one-party control in Washington comes to an end, we must stop the runaway spending that has led to higher costs for American families," Steil said in a tweet.