So, are we going to convince ourselves that we are going to have a depression?
The indicators so far do not so truly designate. Sure, inflation is rampant. But, job growth (more than 370K in June alone) is continuing. Unemployment is at 3.6%. Consumer spending is holding its own. And, the economy grew by 5.7% last year (pre-Russian invasion)- but now it’s contracted by about 2%, due to the war.
(A recession “requires” two consecutive quarters of a shrinking economy- which means it is theoretically possible that we’ve just slipped into the definition of a recession. Even though this one will still have strong job growth and low unemployment, not to mention strong import buys- not like any other recessions we’ve experienced. After all, most recessions are credit-driven.)
But, the GOP (hoping to capitalize on the malaise to capture more House seats), financial analysts, and corporate executives are touting the recession warning.
It’s probably why more than ½ of the US citizens think we are already in a recession. Some equate our current economy with the Great Recession (2007-09)- even though that comparison requires more wine that I could consume in a week. (And, trust me, that’s a lot of wine!) Even though consumer spending habits prove that is a lie.
We certainly are paying more for groceries, and while gas prices have retreated somewhat they are still way above what they were before the Russian invasion of Ukraine. The stock market is retreating- which has devastated many folks’ retirement plans.
But, a recession? Certainly not in the traditional sense of the economic malaise. It will be more of a slump. It shall be shallower and pose less of a threat to corporate earnings than any other such period of the past.
Time will tell.
I graduated college in 1982 when we had a recession and the unemployment rate was high. At least now if we have a recession, we have a different situation with employment.
Great addition to the conversation, Cheryl. Thanks for the share and explanation.
I’ll keep listening to you because it seems like you have more information that is not hearsay. It’s times like this when a good long term emergency savings plan has come into play.
It’s always important to have a saving reserve, Martha. We never know when an unexpected blip (car trouble, a tree falling, a sickness) may visit us.
That’s reassuring to hear that we will not go into a depression, and that it will be more of a slump. Thanks for sharing!
As long as employment keeps up, this will be the most bizarre recession we will have ever experienced, Julie!
It’s good to hear that you only expect a slump, and I am glad your “depression” refers to the economy, and not your mental health.
I am not one prone to mental depression- thankfully!
I was alive during all the years where inflation was common. I remember Nixon and Whip Inflation Now. I remember the gas shortage in 1974 and the gas price rises. I still remember one home mortgage I had with a 13.5% fixed interest rate. Of course, we weren’t in a pandemic with constant supply shortages and the horrors of the war in Ukraine disrupting world food supplies. People are hurting – many people. We know things will get better. I just hope it’s soon.
ME, too, Alana. From your mouth to Hashem’s ears.