Seeing as it’s highly likely in the near future and life is already tight as fuck right now.. what exactly IS a recession? What does it mean for the average citizen like me? (UK). I’ve only ever heard it spoken about in very bad way and the last one happened when I was too young to worry.. but now, I’m kinda shitting it.
TIA
In: 6
A recession is when the GDP growth in a country is negative for at least 2 quarters in a row.
What that means is, the economy is getting smaller for 6 months in a row, less goods are being made, less services are sold.
What a recession usually means for us peons? Companies that are suffering from the recession because they are selling less stuff tend to fire people, under a recession unemployment goes up.
Effectively you have less money and everything is more expensive, business’s go bust because people have less money to spend, it’s a compounding problem…
https://www.theguardian.com/business/2022/may/15/1990s-recession-looms–uk-inflation-rises
I personally believe we are about to see the worst market crash in history and the knock on effects will see big problems for years to come (globally)
If you are young, don’t own a house and you can keep a job down, this is going to be a fantastic opportunity… Buckle up.
The last recession in the UK was in 2020 and it was quite big. The UK’s GDP shrank by around 14%. You may have no been paying attention due to the whole pandemic thing.
Used correctly in (macro) economics, a recession is defined as two consecutive quarters (6 months) of reduction in total production of goods and services (also called GDP) in an economy as measured using currency terms.
There is no way to translate an aggregate measure (like inflation) or outcome (like recession) into specific effects to an individual. There can only be generalized statements that will not apply to everyone.
Some firms and jobs might do better in a recession. For example, high end goods sales might decrease and lower end goods might increase during recessions as people try to economize. Workers and businesses in low end retail might actually see increased activity.
Prolonged recessions, though, almost always leads to increased unemployment, businesses closing/shrinking and downward pressure on wages.
On a broader economic front, recessions are also thought of as a “natural” part of the economic cycle. Economies that expand too fast and too long tend to enter into an imbalance with one effect being high inflation. Some inflation is seen as necessary but if it rises to a very high level, a recession (short! most hope) is a process that “cools off” an economy somewhat and can reduce inflation. In this sense, a short recession can be seen as a necessary evil and will not severely damage the productive output of an economy and indeed might result in some needed rebalancing.
Very generally speaking, many jobs are quite recession proof in the short term. A well run, robust company has the resilience to weather short and mild recessions.
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