It's been the talk of the town recently that a recession is coming and warnings are being sent out to batten down the hatches, but data says otherwise. GDP grew in Q3, wages are up, people are spending, and the job market is stable. All of these factors are signs of a healthy economy without a thought of an upcoming recession. So why is everyone worried that the economy will go south?
The biggest impact on the talk of recession is because the stock market is suffering. S&P 500 has dropped 18% in 2022 and the US economy isn't used to seeing a large negative change like this. The news picks this up and analyzes it as a negative effect on the economy as a whole, but in fact the economy is holding strong through the turmoil in the markets. It also doesn't help that the CEO's of these large investment firms are predicting recessions because of rising interest rates.
If the media and CEO's are foreseeing a recession, then the public will act according to their word and the recession is bound to happen. But, if the economy continues to refuse to show signs of decline, the murmur of a recession will subside and the economy will go back to normal. There are also some other investment firms that believe that their competition are overreacting to the alarm bells. They predict a small fall and a large bounce back. The past 6 months has been riddled with recession talk, but it looks like one might not even come at all.
https://www.cnn.com/2022/12/08/investing/premarket-stocks-trading/index.html
Very interesting post, I found that the market outlook has started to tank the prices in gas recently. This is just another example of how consumer outlook on market ( like your stock market example) can effect the market in the future.. if we enter a recession.
ReplyDeleteThe title of this blog really caught my attention. I really like the idea of if we buy into the idea that a recession is going to happen, then it is bound to occur, but if we keep running our economy like it has been growing then we should be in a fine spot. From what it seems is that there is a slight snowball effect going on. One small event happens, the stock market tanks, then people react and CEOs warn of a recession causing more and more chaos which will eventually turn into a problem.
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