So why is a recession brewing?
While we may not be entering Great Recession territory, I and many more believe that we are either headed or already in a recession. According to Forbes, “A recession is a significant decline in economic activity that lasts for months or even years.”
Six main factors can trigger a recession, one being an asset bubble like the real estate situation I mentioned above. Other factors can include sudden economic shocks like the COVID-19 crisis, not to mention too much inflation. While our job market has remained strong, the inflation rate has yet to level off, so companies may soon cut back costs, including employees.
Another factor can be excessive debt. James Hill, CEO of the digital media company Black Millionaires, advises us to look for a specific date as an official trigger.
“That date is August 31, 2022, when the student loan repayment extension will be lifted by President Joe Biden. The pausing of these payments is hiding the financial stress that consumers are experiencing, and I don’t think analysts or companies are discussing this date enough as an essential metric for consumer financial discretionary spending.”
The US needs consumers to feel confident in their spending habits, so the economy can stay up and running.