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Is the United States Heading for a Recession? 58% of Americans think we are now

Are we in a recession? Most Americans say yes, even though layoffs are near an all-time high and virtually everyone who wants a job has one.

The latest IBD/TIPP Economic Optimism Index, which measures consumer confidence every month, found that 58% of Americans polled believe the US economy is in recession. That’s up from 53% last month and 48% in May, according to the poll.

Fewer than one in five adults surveyed (19%) say their wages have kept pace with inflation. In fact, more than half (54%) of respondents say their salary has not been able to keep pace as the consumer price index hit a new 41-year high.

And Wednesday’s CPI report showing US inflation hit 9.1% in June shook the public, leading the 9.1% figure to trend on Twitter throughout the day. Google asks “What is the definition of a recession?” and “How bad will the recession be?” also rose more than 5,000% in the hours after the CPI report was released.

So it’s no surprise that 91% of Americans polled in the IBD/TIPP poll said they were concerned about the path of inflation over the next 12 months.

But it should be noted that the National Bureau of Economic Research (NBER) has not officially declared the country in recession. The NBER defines a recession as “the period between a peak in economic activity and its subsequent trough, or lowest point”, emphasizing a “significant decline in economic activity” that lasts more than a few months .

So yes, inflation is at record highs right now. But the United States also added a solid 372,000 jobs in June and hourly wages rose 0.3%, although wage growth is slowing. The economy is at a crossroads, but the conflicting data doesn’t necessarily put the US in recessionary territory just yet.

Read more: US adds 372,000 jobs in June with strong labor market seen as bulwark against recession

“There is no set rule about which measures inform the process or how they are weighted in our decisions,” the NBER adds in its explanation of its business cycle dating. “Over the past few decades, the two measures we have given the most weight to are real personal income less transfers and non-farm wage employment.”

There are of course exceptions, such as the April 2020 downturn after the emerging COVID-19 pandemic crippled large swaths of the economy. Even though the decline in economic activity after the February 2020 peak was brief, it was labeled a recession because it was “so large and so widely diffused across the economy,” according to the NBER.

And the NBER committee’s approach to determining dates of economic expansions and recessions is retrospective, which means that an official declaration of a recession probably won’t be made until the country is already one, and the committee has enough data to make this decision.

What does the Federal Reserve say? A new Fed paper by five economists sees a one-in-three chance of a recession by next year, but the authors don’t see a recession as “imminent.” Fed Chairman Jerome Powell also said recently that cutting inflation to 2% could help stave off a recession.

A good thing is that the NBER also notes that most recessions are brief – although the time it takes for the economy to return to its previous peak level of activity can certainly take an “extended” duration.

Even though a recession isn’t here yet, 70% of Americans think it’s coming, according to a separate MagnifyMoney poll, citing inflation, housing costs and inflation as warning signs of a downturn. an economic downturn. And two-thirds of respondents say they don’t feel financially prepared for a recession.

If you’re worried about where silver will go in light of recent spikes in inflation and fears of an impending recession, CNET is here to help. Here are some tips for protecting your finances in uncertain times. And here are three smart financial steps to take now in light of the Fed’s recent rate hike.

And here are some steps to take if you’re thinking of retiring in an age of inflation, or the numbers you should start calculating now to determine if inflation is bad enough to delay your retirement. Finally, retirees who are nervous about inflation and stock volatility can follow these five steps.

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