Keep Factually independent
Whether you agree or disagree with our analysis, these conversations matter for democracy. We don't take money from political groups - even a $5 donation helps us keep it that way.
Is the economy better now that it was in 2022
Executive summary
The short answer is: it depends which measures you compare. Inflation has come down from its 2022 peak—core inflation around mid‑2025 was about 2.9% year‑over‑year, roughly 3.7 percentage points below the post‑pandemic peak in September 2022 [1] [2]. At the same time, growth and labor indicators in 2025 show mixed signals: real GDP rose 3.8% annualized in Q2 2025 after a weak Q1 [3] [4], while forecasters still expect 2025 growth to be slower than the best years of the recovery [5] [6].
1. The headline: inflation is much lower than mid‑2022, but not uniformly “solved”
Inflation that spiked in 2021–2022 cooled materially: official measures show core inflation around 2.9% over the 12 months through June 2025, substantially below the September 2022 peak and near the Federal Reserve’s 2% target range compared with that peak [1] [2]. Multiple sources frame this decline as an important improvement versus 2022’s 9.1% CPI peak environment [2] [1]. At the same time, reporting highlights ongoing “sticky” pricing pressures and upside risks from volatile food, energy and policy changes, so some analysts caution inflation progress is not irreversible [6] [5].
2. Growth: GDP recovered after early‑2025 soft patch, but comparisons to 2022 depend on which period you choose
Real GDP contracted in early 2025 but rebounded strongly in Q2: BEA’s third estimate shows a 3.8% annualized rise in Q2 2025 after a −0.6% Q1 revision [3] [4]. That rebound means output in mid‑2025 is healthier than some feared after 2022’s tightening cycle, but forecasters (Deloitte, Visa) still expect overall growth in 2025 to be slower than the stronger years of the immediate post‑pandemic recovery and slower than 2023 for some scenarios [5] [6]. In short: GDP momentum improved by mid‑2025 versus certain quarters in 2022, but trend growth for the year can still look weaker depending on the baseline [6] [5].
3. Jobs and labor markets: still a relative strength, but with caveats
Treasury commentary and other sources report unemployment around roughly 4.1% in June 2025 and “historically low” levels of joblessness, with payrolls stronger in the second quarter [1]. The Treasury frames this as evidence the economy “resumed” and largely recovered from modest earlier headwinds [1]. However, other reporting points to firms announcing large job cuts in 2025 across sectors and to slower labor‑force participation trends tied to demographics, so labor market strength is uneven [2] [1].
4. Wages, household balance sheets and distributional questions
The Treasury’s retrospective on the post‑pandemic recovery stresses that avoiding a deep downturn in 2021–22 preserved wages and household balance sheets, implying many families were spared the extreme losses that alternative policy paths would have produced [7]. Available sources do not provide a comprehensive, up‑to‑date breakdown of real wage growth or which income groups gained or lost most relative to 2022; reporting emphasizes aggregate improvements in some indicators while warning of pockets of weakness [7] [6].
5. Forecasts and risks: consensus moved from “recession likely” in 2023 to “slower but stable” in 2025, with policy and tariffs as wildcards
Analysts and consultancies expect 2025 growth to be slower than the boom years, even as inflation moderates, and highlight risks from tariffs, migration, and monetary policy shifts [5] [6]. Visa and Deloitte forecast lower GDP growth rates for 2025 than 2022 or 2023 on a year‑over‑year basis, and Deloitte warns of an eventual downturn in some scenarios by 2026 [6] [5]. The Conference Board in late‑2025 frames the economy as entering a “final stretch” with relief but renewed uncertainty after fiscal disruptions, noting near‑term output losses that may be recovered in 2026 [8].
6. How to interpret “better”: choose the metric and the timeframe
If “better” means lower inflation and a more stable price environment, the economy in mid‑2025 looks meaningfully improved versus 2022’s inflation spike [1] [2]. If “better” means sustained faster growth than the recovery years, many forecasters say 2025 growth is slower than the post‑pandemic peak years and highlight ongoing downside risks [6] [5]. If “better” means stronger jobs and incomes broadly, unemployment is low but structural issues (participation, sectoral cuts) complicate the picture [1] [2].
Limitations and final note: sources used here are macro forecasts, official BEA/Treasury releases, and consultancy analyses; they offer competing views on medium‑term growth and emphasize different risks [3] [1] [6] [5]. For a definitive judgment tailored to your priorities (prices, jobs, GDP, inequality), specify which indicators matter most and I will synthesize the relevant data points.