What Is a Non-recession Recession?
The economic activity of today with all of its high inflation, interest rate increases, the ups and downs of Wall Street and the stock market performance, can make you feel like you are under financial attack.
Read: What To Do If You Owe Back Taxes to the IRS
One of your only lines of defense is a steady job, and even that isn’t guaranteed in the highly volatile job market. So it would be nice if financial experts, economic research and the Federal Reserve could agree upon what economic state the United States is actually.
What Is a Non-recession?
Outside of the labor market and unemployment rates, a non-recession occurs when the corrections in the financial market have more to do with asset prices than the actual economy. The Fed is strongly focused on consumers and businesses and specifically consumer spending.
Essentially, a non-recession recession is a mild economic downturn corresponding to a big recession in asset prices where certain financial markets go down even while the underlying economy stays strong.
Recession vs. Non-recession
When there has been a significant and prolonged decline in economic activity anywhere from a few months to a few years, it is considered to be a recession. Along with the economic downturn, there is also often a high rate of unemployment increase in inflation. A non-recession would be a lesser version of this but still occurs when the cost of living and goods is running high while consumer spending remains low.
Is the US in a Recession or Not?
To say it’s been a long year, wouldn’t do the previous years of rebounding from a global pandemic justice. There has been so much news surrounding a looming recession it would be hard to decipher when the U.S. actually entered one. Here are some key takeaways:
- Many professional observers have said a recession is all but inevitable and all but guaranteed it, yet there has been no distinctive timeline followed.
- Calling the economic state a “non-recession recession” is a contingency plan for Team Recessionary if Fed Chair Jerome Powell can’t accomplish a soft landing.
- Financial markets could take a hit even while the underlying economy stays strong making fixed income and equities markets acclimate to current circumstances according to Apollo Global Management Chief Executive Officer Marc Rowan.
- Though it has taken some ups and downs, and despite many predictions throughout the year, the U.S. is currently not technically in a recession more than halfway through 2023.
Will There Be a Recession in 2024?
The current U.S. inflation rate is 3.2%, which is still above the Fed’s 2% inflation target. Due to the ongoing correction in asset prices, the costs of capital will stay elevated well into 2024. Even has rate hikes have somewhat subsided, though a proper recession may not be on the horizon in 2024, it looks like the non-recession recession will continue.
Final Take To GO
Though it may come as little comfort to find out you are in a non-recession, it is technically better overall than being in a full-fledged recession. It would still appear to be a good idea to batten down the hatches financially, but the outlook is not nearly as grim as what was projected even just a few months ago.
FAQ
Here are a few answers to frequently asked questions about non-recession recession.- Is there a recession or no recession in 2023?
- Though it has taken some ups and downs, and despite many predictions throughout the year, the U.S. is currently not technically in a recession more than halfway through 2023. Here are some takeaways from the experts involved:
- Calling the economic state a "non-recession recession" is a contingency plan for Team Recessionary if Fed Chair Jerome Powell can't accomplish a soft landing.
- Financial markets could take a hit even while the underlying economy stays strong making fixed income and equities markets acclimate to current circumstances according to Apollo Global Management Chief Executive Officer Marc Rowan.
- Though it has taken some ups and downs, and despite many predictions throughout the year, the U.S. is currently not technically in a recession more than halfway through 2023. Here are some takeaways from the experts involved:
- What is a non-recession?
- A non-recession occurs when the corrections in the financial market have more to do with asset prices than the actual economy. The Fed is strongly focused on consumers and businesses, specifically consumer spending and labels it a non-recession, if not a soft landing. Essentially, a non-recession recession is a mild economic downturn corresponding to a big recession in asset prices.
- Will the economy enter a recession in 2024?
- Due to the ongoing correction in asset prices, the costs of capital will stay elevated well into 2024. Even has rate hikes have somewhat subsided, a technical recession may not be on the horizon in 2024.
Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.
- The Washington Post. 2023. "What recession? This summer's economy is defying the odds."
- Apollo Academy. 2023. "A Non-recession Recession."
- U.S. Bureau of Labor Statistics. "CPI Home."
