Real estate broker watches any decline

Long, Moderate and Painful: What Next US Recession May Look Like

Many observers expect any decline to be a lot less wrenching than the 2007-09 Great Financial Crisis and the back-to-back downturns seen in the 1980s, when inflation was last this high. The economy is simply not as far out of whack as it was in those earlier periods.

While the recession may be moderate, it could end up lasting longer than the abbreviated, eight-month contractions of 1990-91 and 2001. That’s because elevated inflation may hold the Federal Reserve back from rushing to reverse the downturn.

No matter what shape the pullback takes, one thing seems certain: There will be a lot of hurt when it comes. In the dozen recessions since World War II, on average the economy contracted by 2.5%, unemployment rose about 3.8 percentage points and corporate profits fell some 15%. The average length was 10 months.

The depth and length of the recession will largely be determined by how persistent inflation proves to be, and by how much pain the Fed is willing to inflict on the economy to bring it down to levels it deems acceptable.

https://www.bloomberg.com/news/articles/2022-07-03/long-moderate-and-painful-what-next-us-recession-may-look-like?leadSource=uverify%20wall