That said, other economic authorities often point out contractions first. Staff at the Federal Reserve, for instance, believed by March 2008 that the economy was moving into recession — a full nine months before the official dating. The Fed has yet to signal similar fears in 2019. While output growth slowed to a 2.0 percent annual rate in the second quarter from 3.1 percent earlier in the year, according to early data, that is still a decent reading, and consumer spending remains strong.
What do slowdowns feel like?
The fact that the economy is not shrinking yet and may avert a recession altogether does not mean that everything will be sunshine and rainbows.
The 2015-16 slowdown shows why. Growth pulled back that year as fuel prices plummeted and oil-patch investment dried up, leading to less drilling and less equipment buying. Unemployment shot up in Wyoming and Texas; oil and gas employment nationally fell off a cliff. Consumer sentiment even took a hit.
For the most part, though, the pain was geographically isolated. American shoppers over all continued to spend, household income rose and poverty fell.
Will slower growth leave me unemployed?
The 2016 experience proved that for workers in affected industries, a slowdown alone can be enough to cost a job. Manufacturing work seems most acutely at risk in the current weakening: Hiring in the sector has already slowed — it has grown just 1 percent in the past 12 months, down from a 2 percent pace last summer.
If economic growth drops below its sustainable level — which many economists put in the neighborhood of 1.75 percent, based on demographic and productivity trends — it could, in theory, lead to higher unemployment and slower wage growth more broadly.
Article source: https://www.nytimes.com/2019/09/13/business/economy/recession-slowdown-difference.html?emc=rss&partner=rss
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