Is the Media Forcing Us Into a Recession?
The current economy has been difficult to pin down. First and foremost, everybody is discussing the release of the less-than-impressive GDP report that showed modest 2.9% growth once adjusted for inflation, a slight contraction from Q3 2022’s 3.2% GDP growth.
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Indeed, for the second half of 2022, numerous news reports featuring quotes from prominent financial experts and economists warned Americans to raise their savings account balances and brace themselves for a prolonged period of economic decline.
Many media outlets push people to remember the recent recession because that drives engagement and viewership. On the positive side, such reportage might incite viewers to rethink how they manage their finances.
Media Narrative Focused Around Recession a Self-Fulfilling Prophecy?
All of this talk about a recession might lead to one. Consumer behavior and business planning are heavily influenced by how people feel. Although difficult to quantify, fear, hope, uncertainty, and confidence are crucial to the economy’s performance.
Based on some of the warnings, you might believe a recession in 2023 or 2024 is a foregone conclusion. That is not always the case.
So looking ahead, those factors could derail the economy and cause the harsher recession that people are concerned about. If consumers begin cutting down on their spending significantly in the coming months, it is likely to put the country in a recession in the first place.
Even if the economy slows down over the next year or so, thoughts of an inescapable recession may not be warranted just yet. While many current economic indicators are typical of a recession (including weak GDP figures), they do not typically involve the hot job growth seen in the United States this year. Recessions are also rare when unemployment falls, as it is now quite low (a rate of 3.5%, per December Bureau of Labor Statistics figures). When nearly everybody who wishes for a job is working one, the economy is not in the firm grip of recession.
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It’s a good thing to talk about a possible economic downturn. However, if the media focuses solely on the negatives, a recession could easily turn up when it could’ve been avoided.
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