Mild Recession in July 2023

What is a recession?

When an economy is experiencing poor development, slow growth and starts to shrink, it is said to be in a recession.

It is defined as at least two consecutive quarters of negative economic growth. It is not entirely clear if this sluggish development must be observed on certain dates; it is only required that an economy shrinks for at least six months.

A “recession“—the term for a period of economic contraction—that may begin small-scale might develop into an economic depression. There is a sharp fall in economic activity across the board during a recession. This could last anywhere from a few months to several years.

What happens in a recession?

During a recession, the economy shrinks because of pullbacks in economic activity, especially consumer spending and business investment. Companies reduce recruiting and lay off workers, which results in rising unemployment and stagnant pay growth. The majority of the time, businesses would rather stop or freeze hiring and begin pressuring their employees to perform at a certain level or risk being fired.

A Mild Recession Is Likely Starting in

July 2023

What is Mild recession?

The general idea of a mild recession is that growth isn’t great but things are okay. Like a splinter in your finger – it’s uncomfortable but bearable. The data is beginning to indicate that *something* is coming, including a slight slowdown in the labor force with unemployment rising (somehow, despite a gap in the labor force), a housing market blowout (despite improved homebuilder sentiment), yield signs in manufacturing, rents relaxing (also already occurring), and a slowdown in consumer spending, though it may not be all that bad. It could start now, it could start in 2024. The slowest tree falls of all time.

How a Recession May Affect You

Whether or whether a downturn in the economy has been officially declared as a recession, the impacts of an impending recession can affect your daily life. Some common ways people are impacted include:

The cost-of-living increases. You could discover that everyday necessities like food, petrol and clothing are more costly now than they used to be when inflation is a factor in a recession. People frequently adopt stringent budgets and reductions in discretionary spending as a result of rising costs, which make it difficult for them to make ends meet.

Job loss or reduction in hours. In a recession, companies often reduce their staffing levels to save money. You may risk losing your job or experiencing a reduction in hours.

Difficulty finding employment. The labour market has been dominated by employees for some time. As firms battled for a small pool or limited pool of workers, they might land new positions with higher salaries and more perks and benefits. That’s likely to alter during a recession, with competition for the few available positions being tighter and the ability to find a new job taking significantly longer.

Things to avoid when there is a recession

• Financial hazards, such as the risk of default, company collapse, and bankruptcy, rise when the economy is in a recession.

• It is important to keep your exposure to these financial risks as low as possible and to avoid expanding it.
• For example, you should refrain from co-signing a loan, getting an adjustable-rate mortgage (ARM), or taking on additional debt.
• If a worker decides to locate a new position later, they should be ready for a more time-consuming search.
• If you’re a business owner, you may need to wait until the recovery has started before investing in capital upgrades and taking on further debt.

If you have any recommendations/ suggestions or ideas for better procurement during the next Mild Recession, please comment below :

Komal Gandhi

Writer, Blogger