WASHINGTON — The warnings have been sounded for more than a year: A recession is going to hit the United States. If not this quarter, then by next quarter. Or the quarter after that. Or maybe next year, according to an Associated Press report.
So is a recession still in sight?
The latest signs suggest maybe not. Despite much higher borrowing costs, thanks to the Federal Reserve’s aggressive streak of interest rate hikes, consumers keep spending, and employers keep hiring. Gas prices have dropped, and grocery prices have leveled off, giving Americans more spending power.
The economy keeps managing to grow. And so does the belief among some economists that the United States might actually achieve an elusive “soft landing,” in which growth slows but households and businesses spend enough to avoid a full-blown recession.
“The U.S. economy is genuinely displaying signs of resilience,” said Gregory Daco, chief economist at EY, a tax and consulting firm. “This is leading many to rightly question whether the long-forecast recession is really inevitable or whether a soft-landing of the economy” is possible.
Analysts point to two trends that may help stave off an economic contraction. Some say the economy is experiencing a “rolling recession,” in which only some industries shrink while the overall economy remains above water.
Others think the U.S. is experiencing what they call a “richcession”: Major job cuts, they note, have been concentrated in higher-paying industries like technology and finance, heavy with professional workers who generally have the financial cushions to withstand layoffs. Job cuts in those fields, as a result, are less likely to sink the overall economy.