Are we in a recession? What's the deal?

Hi Svyarom,

I have heard a lot of discussion on this topic, and there is an aspect of it that slightly confuses me. I find it strange that people will vehemently argue that we are not in a recession. I understand that we will not know we have entered into a recession until after the fact, but there are observable issues with the state of our economy that seem to make the point of arguing we are not in a recession inconsequential. It is as if by saying we are not in a recession, people are trying to say our economy is doing fine. However, when you see stats such as American households have lost 6 trillion dollars in three months (Zeisloft, 2022), it seems to make the argument that we are not in a recession seem silly.

Thanks you for your insight!

Reference

Zeisloft, Ben. (2022, September 9). American Households Lost $6 Trillion In Three Months.

Daily Wire. Retrieved from: https://www.dailywire.com/news/american-households-lost-6-trillion-in-three-months

You make an excellent point that the economy is amidst a recession. Another key variable to consider when discussing economic activity is the labor market. As of August 2022, the U.S. Bureau of Labor Statistics states that the total number of unemployed people is 6 million (2022). Not all of this is because of the pandemic. Other factors of unemployment come from the Great Resignation movement. This movement is where people are moving towards more of a work-life balance (Segal, 2022). The challenge of this move is that it makes institutions think about how they will maintain their relationships with employees. As values continue to shift it will be interesting to see how the work atmosphere changes.

Sources

U.S. Bureau of Labor Statistics. (2022). U.S. labor market shows improvement in 2021, but the COVID-19 pandemic continues to weigh on the Economy : Monthly Labor Review. U.S. Bureau of Labor Statistics. Retrieved September 11, 2022, from https://www.bls.gov/opub/mlr/2022/article/us-labor-market-shows-improvement-in-2021-but-the-covid-19-pandemic-continues-to-weigh-on-the-economy.htm

Segal, E. (2022). How companies can respond to the rising tide of the great resignation. Forbes. Retrieved September 11, 2022, from https://www.forbes.com/sites/edwardsegal/2022/01/12/how-companies-can-respond-to-the-rising-tide-of-the-great-resignation/?sh=707863d73d54

Hi Svyarom,

I enjoyed reading through your post as you have written about a topic that I feel is not emphasized or addressed enough in the news or political arena. With Covid-19 and the economy already not in great health, it looks like we are now in a recession just based purely off of the increased percentage of inflation in everything. I think in the midst of Covid-19, money was dished out quite frequently to cover the cost of job loss, school expenses, etc... but very few gave thought to what the costs would be in the long run and how it would effect us. As we can see now, being two years or so since the start of the pandemic, the spending has effected us and will continue to do so for who knows how long. Thanks for sharing!

Hello Svyarom,

I find this blog very interested. Surely we are experiencing the symptoms of a recession. Gross domestic product shranked for the second quarter in a row, a common, but unofficial, definition of a recession. Last week's report on economic output recharged speculation about whether the U.S. economy is in a recession. But GDP isn't the only measure that matters, especially in the tangled mess of the pandemic economic. The National Bureau of Economic Research (NBER) has the final say on whether a period of economic decline is a recession, which can lag for months. NBER economists consult a wide range of indicators that suggest this year's economy stands on sturdier ground than in recent recessions.

Evelyn Lara-Mason

Wk 6 Blog Response 1

Hi svyarom,

Recession feelers has been on the horizon. It is a good time to bring this up for others to become aware of changes, what is happening in the open markets, banks and why there are shortages. The characteristics you mentioned are right on point and while there has been a downside and consumers are being frugal (Cox, 2022). When ethe Federal Reserve (our central bank) increased the money supply to influence spending as a short run tactic to increase the GDP and keep the United States from falling into a recession or depression (Ross, 2022). While there was a huge jump in unemployment, after the pandemic there were new job opportunities that were despite the pandemic (Montani and Staglianò,2022). With the new outlook on behaviors, uncertainty of job retention, and outcomes is best written in an issue by Montani and Staglianò, of The Economist wrote, “The pandemic and the damage done will accelerate trends that were already reshaping business” (2022). This gives way to understand that in time the scales will rebalance. There are bottlenecks, there has been shortages, but food is still viable, rates have increased but homes are selling like when hot cakes on a stick was invented. When I look back at a depression or even a recession, there was little to nothing. This does not mean people have not struggled but a recession leaves no room for an upward swing in purchasing power, but we are in the long run from the surplus of money dumped by the Feds and inflation is taking a bite out of the means to buy an abundance.

This was a good insight for looking at how the world is being seen.

References

Cox, J. (2022) Here’s how to know if we’re in a recession, and it’s not what you think, Investopedia. https://www.cnbc.com/2022/07/26/heres-how-to-know-if-were-in-a-recession-and-its-not-what-you-think.html

Ross, S. (2022) Understanding how the Federal Reserve creates money. Investopedia. https://www.investopedia.com/articles/investing/081415/understanding-how-federal-reserve-creates-money.asp#:~:text=The%20Fed%20creates%20money%20by,loans%20to%20consumers%20and%20businesses.

Montani, & Staglianò, R. (2022). Innovation in times of pandemic: The moderating effect of knowledge sharing on the relationship between COVID‐19‐induced job stress and employee innovation. R & D Management, 52(2), 193–205. https://doi.org/10.1111/radm.12457

Svyatoslav,

I found your blog post very enjoyable to read. Today's economy has been taking hits left and right. It makes you wonder whether there is some form of impending doom to come for the economy. In reading your post, I gained a better perspective of the term recession, and what causes a recession to take place. Upon further research conducted, i found that certain criteria must be in place in order for a recession to be identified. "The United States’ National Bureau of Economic Research (NBER), a nonprofit organization whose business cycle committee tracks peak and trough months of economic growth... defines a recession as a widespread contraction in the economy that lasts more than a few months, with each of the three criteria—depth, diffusion, and duration—being met to some degree.". (Burga, 2022)

Thanks for sharing!

References

Burga, S. (2022). What a Recession Actually Is—And How to Know If the U.S Is Entering One. Retrieved from https://time.com/6201205/what-is-a-recession-2022/