By Michael Jeanfreau, Senior Economist
The United States economy is anticipating1 a recession sometime in 2023. The Federal Reserve (Fed) is hiking interest rates and increasing the cost of doing business to curb demand in an effort to aggressively combat uncomfortably high inflation. Gross Domestic Product (GDP) growth is beginning to falter and businesses are cutting back on investment while the unemployment rate is no longer trending downward. During both recessions in recent memory, the Great Recession and the Pandemic Recession, economic fallout was felt across the world.
At the onset of a recession, households may experience a variety of negative effects, including job loss and income reduction, more difficult debt management, and difficulty in obtaining credit. This can lead to increased financial stress and difficulty making ends meet. Some households may also experience a decrease in wealth due to declines in stock prices and other investments. Thus, recessions can lead to increased economic hardship and poverty. More...