Recessions aren't exactly rare. in fact, the US has had one recession on average every 6.5 years since 1945. Experts say we're likely on our way to another one now.
We saw a recession in 2020 when the coronavirus pandemic struck and nearly the entire economy was shut down due to arbitrary federal and state policies. According to a piece by the LA Times, we can expect another recession to fall into our laps soon, but this one isn't going to be so bad.
Experts Say a Recession Is Coming but It Won't Be That Bad
Many economists insist that the recession we're about to see is going to be fairly mild and have a quick recovery. “We’re calling for a small ‘r’ recession,” Jack Ablin, chief investment officer at Cresset Capital, told the LA Times. “It means it’s not going to be protracted and things aren’t going to fall apart,” as they did during the Great Recession and again in 2020 when the pandemic struck."
Americans are doing much better now than we were in 2020 and apparently banks are currently well capitalized. But the S&P 500 stock market is down more than 20% since the beginning of the year, which isn't surprising due to the inflation our country is experiencing right now. Americans are buying far fewer items like appliances and services in order to maintain their wallet.
A Harvard economist, Larry Summers, says that recession is close in sight when inflation rises above 4% and unemployment drops below 4%. We've already hit both those numbers; in May inflation was 8% and unemployment was 3.6%.
There are countless employers around the country who can't fill empty jobs and small business owners report the worst financial conditions in the last 48 years. Experts say things are really slowing down, but only because we had been growing so quickly not too long ago.
"I think they're seeing it like to worst of two worlds—either stagflation or recession," Beth Ann Bovino, chief US economist at Stanford, told the LA Times. "My belief is that in order to avoid stagflation, I think they would risk the economy and go for the recession rather than suffer stagflation for however many years." Stagflation is a combination of high inflation and stagnant activity.
But some economists say that because there are so many job openings currently, it will be easier to get workers back into the workforce, which means it will be easier to recover the economy after a recession.