Recession Fears Growing Exponentially Amid Worrisome Economic Trends
Many experts are warning of worrisome economic signs that indicate the country could be headed for a recession.
Many fear that America is currently entering a recession-era. With interest rates increasing due to the inflation acceleration, businesses are scrambling to maintain sales to keep from losing revenue. Some of the biggest corporations like Apple and Netflix have dropped in stock market value, frightening investors and consumers alike. The federal government, fortune500 CEOs, and the Federal Reserve are figuring out how to boost revenue and stabilize the economy.
Though there is a lot of anxiety around a potential recession, it’s common for capitalist countries to go through financial peaks and valleys. The United States has gone through many precarious cycles of economic stress, most recently the housing market crash in 2008. Other countries have been more successful at having extended periods without crashes. Australia went 29 years without a recession, which is the longest capitalist nation in the world’s history to do so. The growing streak was abruptly ended by 2020’s COVID pandemic, which, to be fair, halted many countries’ economic prosperity.
Between Australia’s 29-year economic growth streak, America had two different recessions. The first occurred in 2001 due to Y2K anxiety and the 9/11 terrorist attacks, and the second was the notorious Great Recession of the late 2000s. Though the United States gloats about its impressive economic profitability, market capitalism has produced 35 recessions in the country since 1854. 1854 was the first year there is recorded financial data to reference, but there could’ve been even more economic divets in the country we don’t know about.
One committee in America is in charge of recording the economic ups and downs of the US economy. The committee is called the National Bureau of Economic Research’s Business Cycle Dating Committee, which has its own definition of a recession’s criteria. The group defines a recession as “a significant decline in economic activity” which lasts for more than a couple of months. This could mean that two months of monetary declines that soon after experience an economic upswing could still be documented as a recession.
Many dispute the committee’s designation of the pandemic’s recession in 2020. The economic drop only lasted two months and quickly picked back up afterward. This was the shortest recession recorded in American history, which has led many to believe it should not be classified as such. But the committee doubled down, stating that the economic decline was so unequivocally significant that it could only be classified as a recession.
A couple of factors may keep the United States from another economic disaster. Many analysts point out that the national unemployment rate is at a surprisingly small figure of 3.6%. The current unemployment figure is one of the lowest in the country’s history. Still, the United States’ overall economy dropped by 1.4% in 2022 and continues to decline. If this trend extends through the following months, it’ll indeed be classified as a recession by the National Bureau of Research.
With the price of general goods increasing, geopolitical conflict, and unending supply chain shortages, it’s no wonder companies are experiencing diminishing returns. It’s still unclear if America’s current economic state will be recorded as a recession, but that could change during the next fiscal quarter.
