In an attempt to slow inflation, central banks around the world, including the Federal Reserve, have raised interest rates in recent months. While these policies are meant to cool the economy, they also increase the likelihood of a recession.
Despite a recent drop in job openings, business leaders are bracing for an impact (and potential layoffs) as tech behemoths warn of or announce upcoming hiring freezes.
Some consider that there is a recession as, in 2022, the United States has already experienced two consecutive quarters of negative GDP growth. Others, however, are waiting for the National Bureau of Economic Research to make the final decision, which has yet to be made.
Why the National Bureau of Economic Research (NBER) hasn’t made the final decision?
A recession is followed when there is a contraction in the economy i.e. because of a decrease in demand for goods and services and an increase in unemployment. Economists also consider a fall in GDP for 2 consecutive quarters to be a contraction.
But, as of now, we only see a fall in GDP but the demand for goods and services is as it is, same is the employment rate.
When economist typically base their prediction on a number of indicators.
What are the Recession Indicators?
- A decline in Real GDP
- Rise in unemployment
- Stagnation of industrial production
- A decline in consumer spending
You see, among the above four indicators only one is affecting the most in the US i.e. the ‘Decline in Real GDP’ but it might be due to the other aspects affecting the GDP which might be the reason that the National Bureau of Economic Research has not made the final decision.
Although the decision is not made by the Bureau of Economic Research, it hasn’t stopped billionaires, investors, and the world’s brightest economic minds from publicly declaring whether the US and global economies are officially in the situation or rapidly approaching based on the current situation of decrease in monetary value, decrease in stock value, etc.
It can be tempting to go on a cost-cutting during a recession, and one option could be to consider eliminating your accounting support.
This may appear to be a solution but the best way to stay in a strong financial position in the long term is to get the help of financial experts who can keep an eye on cash flow and provide you with good suggestions. Nimblefincorp can be of help to you to provide you with a good cash flow suggestions.
