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Global market commentator The Kobeissi Letter asserted that the U.S. is currently in an economic recession in a tweet published on Nov. 19.
"Current situation: 1. Housing market falling at fastest pace since 2008. 2. Tech layoffs above 2001 levels. 3. Credit card debt near $1 trillion for first time. 4. Crypto and FTX collapse mark $2 trillion+ in losses. 5. Consumer confidence at all-time low. This is a recession," the tweet read.
Investopedia defines a recession as a negative turn in the economy that is significant, widespread, and prolonged. An economic recession is also defined as when negative gross domestic product (GDP) growth occurs for two consecutive quarters. Economists also make a determination on recessions by considering industrial production, payrolls, and sales. A recession can be as short as two months, or as long as 18 months, as shown during the 2008 Great Recession.
According to Scott Rasmussen's Dec. 2 "Number of the Day", 58% of voters believe that the U.S. economy is in a recession. Twenty percent said that there's no recession, and 22% are not sure. Voters were more confident in the economy in 2019 when 40% of voters said that the U.S. was in a recession. The poll was conducted by questioning 1,200 registered voters with a 2.8% margin of error.
The Center on Budget and Policy Priorities reported that inflation rose significantly in 2021, which is a major contributor to 2022 recession discussions. Energy prices, which rose dramatically in 2021, are a major contributor to current inflation struggles. In early 2021, the Federal Reserve predicted that the increased inflation rate would "be transient." However, despite the rate dropping briefly, it remains high. The October Consumer Price Index (CPI) report stated that inflation was at 7.7%, making the CPI 7.7% higher in October 2022 than it was in October 2021. In June 2022, the CPI hit 9.1%. The Federal Reserve currently plans for a 2% annual inflation rate to balance the economy.
Forbes agreed with many of The Kobeissi Letter's assertions, saying that the tech sector is dealing with both major layoffs and a dropping, unstable stock market. Despite the negative GDP growth in two consecutive quarters in early 2022, the National Bureau of Economic Research has not yet officially declared a recession, which Forbes attributes to the steadiness of both consumer spending rates and the labor market. The housing market, however, is heading downward, which Forbes reported was expected, but the drop will continue alongside rising interest rates, leading to buyers and renters paying more overall. All of these factors, combined with low consumer confidence, will inevitably lead to a recession, according to Forbes.
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