eli5: Why are they telling me that there’s a recession coming when unemployment is low at 3.6 or .9 percent as of this last month?

Question

What the title says.

In: 0

Answer 1

The generally accepted definition of a recession is two consecutive quarters of GDP decline. Normally declining GDP and increasing Unemployment go hand and hand. Neither situation is the case now and nobody is claiming we are in a Recession. The first two two quarters of 2022 were both marked by a declining GDP and A decreasing unemployment rate (and a historically low unemployment rate). This anomaly was attributed to some distortions caused by the pandemic and the fact that a relatively large cohort of boomers were reading the workforce while a smaller cohort of young workers were entering the workforce. The later situation will continue for the foreseeable future. Ironically, the effects of the declining birth rate could result in both a stagnant economy and a labor shortage. Future recessions may look and feel different than they have in the past.