Federal Reserve Fights Inflation, Walks Line Between Soft Landing, Recession

The Economy
By Dave Kilby -September 28, 2022

The Drumbeat of a Recession Is Growing Louder, But It Is Probably Not Here Yet

We are sure in an odd place, economically speaking. Job growth is solid, and households keep spending money. Yet the world seems to think we are in a recession.

Question: What is the opposite of a jobless recovery? A recession without layoffs? Is that a recession? We are also in a quirky time with data continuing to be volatile due to the ebbs and flows of consumption and supply chain disruptions from the pandemic.

The news seems to focus on the risks of the economy being in a recession or soon to enter a recession. This can be seen in the number of people asking that question to Google, which has skyrocketed.

It is higher now than in the past two recessions, but in the past two, it was pretty obvious since there were massive increases in the unemployment rate. This time is more confusing since the unemployment rate is falling.

It is not officially known whether the economy is in a recession. The National Bureau of Economic Research (NBER) is the self-appointed arbiter of the American business cycle and has been dating recessions for almost a century. They are precise with the start and end dates of a recession, but they are not timely when announcing when a recession happens.

They need to wait for the release of economic reports and revisions before they make a decision. They take a deliberate retrospective approach, so they do not have to revise. Since 1980, there has been an average of 7.2 months from the start of the recession to the NBER announcement.

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