Industry Insights

It’s been the topic of conversation for most of 2022: Are we in a recession? How bad is it? How long will it last? And will inflation ever slow down? 

Read On to Learn More About a Potential Recession in 2023

First, let’s start with a few terms: While there isn’t a single agreed upon definition for what constitutes a recession, the general consensus is that it happens when there’s a decline in economic activity over the course of two consecutive quarters in real (aka adjusted for inflation, the real dollar value) gross domestic product. But some say that that’s too narrow a definition, that GDP alone isn’t enough to determine whether a recession is happening, and that other factors should be weighed before making any kind of judgment — or starting to worry. 

Another definition looks at other activities and considers them collectively, including a significant decline in economic activity that lasts at least a few months, coinciding with a reduction in production, increased unemployment, reduced income and other factors. 

A recession in the United States tends to be tied with other major markets in the world, particularly Europe and Japan, as so many economic and supply chain items are interlinked and interdependent. It’s rare for a major economic powerhouse to go through a recession alone; that’s why it’s usually referred to on a global or international level. 

As of late 2022, the general idea is that yes, the U.S. is in a recession, given that world markets are on a downswing and inflation is rising. The research firm Ned Davis says there’s a 98% chance of a global recession. 

On the other hand, things might not be as bleak as some believe. 

Take, for example, unemployment. Experts say a clear indication of a recession is a steady decline in employment and an increase in people applying each month for unemployment benefits; but weekly applications have kind of stalled at rates not seen since before the COVID-19 pandemic. In fact, employers have been able to add an average of 370,000 jobs in the past three months. That’s a healthy rate of hiring. The job market is considered robust and strong, even if inflation is higher than it’s been in years. 

The Bureau of Economic Analysis even changed its mind, reporting that the U.S. economy changed course in the third quarter of 2022, growing at an annual rate of 2.6%, suggesting a turnaround if a recession had been in process. 

So what does this mean for you? Proceed with caution. Don’t think the sky is falling but don’t spend like money is limitless. Be smart and prudent, budget for limited and slow growth, and if things turn around more quickly than expected, feel more confident investing in your team and your company. 

Want More Information? Contact Our Team at Method Recruiting

If you’re looking for additional insight into how to forecast your growth in 2023, call our team at Method Recruiting today. We can help you determine how many people you might need to hire and can even help you find great candidates to help address any rapid growth. Contact us today!