Recession: How Long Will It Last This Time?
With increased reports of bank layoffs and instability, concerns about an impending recession are growing. As we ponder how long a potential downturn might last, examining the duration of previous economic slumps may be helpful.
The Business Cycle Dating Committee, a group of economists at the National Bureau of Economic Research, determines recessions’ official beginning and end.
They describe recessions as periods of significant economic decline across various sectors that continue for several months or more. The committee notes that economic expansion is the standard state of the economy, and most recessions are short-lived.
The pandemic downturn in 2020 was confirmed to have lasted just two months, making it the shortest US recession ever recorded. However, future recessions may not be resolved as quickly. Federal Reserve economists expect a mild recession later this year, followed by a two-year recovery.
The recent banking industry turbulence is expected to extend the duration of the upcoming economic downturn beyond the average recession length. Previous recessions related to financial market problems have been more persistent and severe.
Another challenge of current economic conditions is that the Federal Reserve intentionally slows down economic growth to control inflation. Preston Caldwell, the chief US economist at Morningstar, notes that lowering rates generally helps the economy recover from a recession.
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He expects inflation to be under control by the end of this year, allowing the central bank to start decreasing rates in 2024, signaling the start of an economic recovery.
Cathy Curtis, the founder and CEO of Curtis Financial Planning in Oakland, California, advises that individuals prepare for a recession by updating their resumes and staying connected with their professional network.
She also suggests that having an emergency savings account with at least three to twelve months of expenses saved can help individuals weather a downturn without accumulating debt.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
