Will There Be a Economic Recession in the Near Future?

By Staff

A recession seems near for many, but what are the chances? A study from October 2022, claimed that 65% of economists polled that a recession would happen within the next 12 months. So what is a recession exactly? A recession is a period of economic decline in which trade, investment, and general economic activity falls. This can be determined by a fall in GDP (Gross Domestic Product). How common is a recession you may ask? There have been as many as 48 recessions, since the founding of the United States. There has been one recession every 6.5 years on average. Consequences that follow a recession include unemployment, lower wages, stocks plummeting, and less demand for goods. 

So what are the chances? There were many worries last year of a recession, the chances seem to be going down as of now, but many are still betting that the market will crash. Economist’s opinions vary from a 20% chance of a recession to upmost 80%. Optimistic economists would like to claim that we will be fine, but they have no way of knowing for sure. “To say today that we’re going to have a soft landing is so premature.”  says Michael Kantrowitz. Veteran economists, investors, and market experts like Kantrowitz, are also concerned about a recession. Investors are worried of a recession because economic growth has been slowing to a crawl. Worries are also caused by the growing inflation rate which has been 2% above the Fed’s goal. Rising credit card, auto loans, and mortgage loans could create a downturn in household spending which will also be a negative for the economy. 

There is good news, CNN has claimed that “The case for a 2023 US recession is crumbling.” The unemployment rate has remained low and the job market has remained high which makes the case that the market is doing great and that a recession may be out of the picture. “For this year, given these job numbers, it’s hard to see a recession. Increasingly, the odds of a recession this year are fading,”  Mark Zandi said.

Many economists still claim that there is an almost ⅔ chance that there will be an economic downturn by the end of 2023. This could lead to many issues. Unemployment, a housing market crash, decreased asset values, and general economic crisis. Optimistic of a safe economy or not, if this growing concern of a recession can teach you one thing, it would be that by failing to prepare you are preparing to fail.